If you’re a logger and the fire is your fault, are you out of business?
It’s a windy day in late fall. The woods are dry. Your fellerbuncher is operating deep in a stand of trees. A pinhole leak erupts in a hydraulic hose and sprays fluid inside the engine compartment. In seconds, the machine is engulfed in flames. The operator barely escapes, but cannot fight the fire himself and gets help. The fire department is called while your crew uses all the water and fire extinguishers they have, but the fire spreads into the woods. By the time help arrives, the forest fire has grown and is moving fast toward a nearby lake lined with homes. You notify your insurance agent.
Days later the fire is out. Luckily, no one was seriously injured, but over 500 acres of timber have burned. Four homes were damaged or destroyed along with a small store and part of a mature apple orchard. Initial estimates indicate damages exceed $1,000,000.
Your machine started the fire and your maintenance practices are called into question. Insurers of the burned homes and businesses are calling, as well as the Workers Compensation carriers for several firefighters who were injured. You refer them to your insurance company.
One of your worst nightmares has only just begun. You receive a letter from your insurer telling you that, while they will continue to handle the claims for the injured firefighters, there is no coverage for the property damage claims. How can that be?
Why Isn’t Fire Covered?
Most insurance companies include a standardized endorsement in their commercial general liability policies when they insure a logger that excludes two things:
- Property damage due to fire (any kind of fire)
- Property damage to any vehicle you load or unload
While you may be able to cover the cost of damages to a truck belonging to someone else if a log is dropped on it while it is being loaded, can you cover the cost of the property damage in this fire scenario? Not many loggers could.
What To Do Before There Is a Fire
So what should you do before you find yourself in this kind of situation? Check to see if there is an endorsement like this on your policy. If there is, you may wish to contact your agent and discuss your options. If your insurer cannot give you the coverage you need, your insurance agent or another agent may have access to insurance companies that can. There are insurers that provide this kind of property damage coverage automatically for loggers at no additional charge with the added bonus of providing property damage coverage for trucks you may damage during loading.
Acadia is pleased to share this material for the benefit of its customers. Please note, however, that nothing herein should be construed as either legal advice or the provision of professional consulting services. This material is for informational purposes only, and while reasonable care has been utilized in compiling this information, no warranty or representation is made as to accuracy or completeness. Recipients of this material must utilize their own individual professional judgment in implementing sound risk management practices and procedures.