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After the Fires: Insurance Experts Advise How to Handle Loss Claims

After the shock and awe of the fires that ravaged much of Northern California wine country, businesses were required to take a sobering account of the losses and damages sustained and start filing claims. However, the manner and time in which claims are submitted to an insurance carrier can affect how they will be processed and adjudicated. Los Angeles-based attorney Linda Kornfeld, Blank Rome LLP’s vice chair of the insurance recovery practice, counseled Wine Business Monthly with a quick checklist for wineries, homeowners and vineyard owners to follow—whether there has been damage/loss or not.

  1. Find your insurance policy and read it to see what is or is not covered.
  2. Give notice to your insurance company before making decisions to spend money.
  3. If you can’t get ahold of your insurance company, read your policy and know where the sticky points are. Sticky points refer to: definition of grapes as “crops” or “stock,” what state the grapes are in (i.e., growth, removed from vines, in vats), state of destruction (i.e., vine isn’t destroyed, but grapes are smoke infiltrated), what constitutes covered loss/damage, who bears the burden of proving what happened and dealing with an independent adjuster versus public adjuster.
  4. Gather documents to establish what your financial obligations to others are and who has financial obligations to you, as well as what your historical profits have been and how you’ll prove damage.

Kornfeld cautions wineries and vineyard owners as to the different types of policies concerning grapes. Crop insurance applies generally to grapes on the vines. “Once the grapes are off the vine and they’re in the vats fermenting, and the manufacturing process is happening, they’re no longer a crop. At that point you’re looking at traditional property insurance or traditional business interruption insurance. You’re no longer talking about this specific grape on the vine and the volatility of that grape now that it’s in a vat or barrel. Instead we are trying to value it based upon the language used in a traditional property policy,” advised Kornfeld.

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"After the Fires: Insurance Experts Advise How to Handle Loss Claims," by Michael S. Lasky was published in the December 2017 issue of Wine Business Magazine