Wildfires can be devastating for businesses. Not only can your physical building or equipment burn, but you might also lose customers, sales, and the very future of your company. When a corporate or other large party may have caused the fire, documenting your losses carefully becomes important. This will guide you in seeking recovery through legal action beyond a simple insurance claim.
Why Is Documenting Business Losses Important?
Documenting your business losses is like taking a picture of your financial health before and after the wildfire. If you do not record the details, it can be hard to show anyone—like a court, an adjuster, or the potentially responsible corporation—exactly how much you lost.
You can seek damages in court in wildfires involving a company’s negligence, such as an electric utility failing to maintain power lines. But to do that, you must prove how the fire hurt your business. That is where thorough documentation comes in. It helps you build a stronger claim, showing how the fire caused you harm.
What Should You Note Right After the Fire?
If it is safe to do so, try to gather basic information:
- Location of the Fire: Where it started, if known, and how it reached your property.
- Date and Time: When the fire damaged your business site.
- Immediate Damage: Take photos or videos of burns, smoke damage, and destroyed equipment.
- Witness Statements: If any employees or neighbors saw how the fire started or spread, record their accounts.
This information might come from news reports, local authorities, or observations. The more you know, the easier it is to connect the damage to the wildfire event, especially if you believe a corporate party caused or allowed the fire.
How Can You Prove Physical Damage?
Physical damage includes burned buildings, ruined furniture, destroyed tools, or damaged inventory. To prove this, you need to show exactly what was lost and what it was worth.
Some steps to take:
- Photos and Videos: Document the damage from every angle, if possible.
- Itemized Lists: List each piece of equipment, stock, or property the fire harmed. Include serial numbers, models, or unique identifiers if you have them.
- Receipts and Invoices: Collect purchase records or maintenance receipts to show the value or cost of your items.
- Inspection Reports: If a professional inspects the damage, keep their written report.
These details help a court, mediator, or other third party see the true extent of your business losses. If you can show exactly what was lost, it is harder for the other side to argue your numbers are not real.
What About Lost Profits?
Losing profits can hurt a business even more than losing physical items. You cannot open for weeks or months. Or perhaps customers go elsewhere, and you cannot meet sales targets. In some situations where a corporate entity’s negligence caused the wildfire, you can try to recover lost profits.
- Financial Records: To show lost profits, you need old sales reports, balance sheets, and income statements from before the fire. This helps prove how much money you usually make.
- Projected Earnings: Show how much you expected to earn if the fire had not happened. You might use past yearly trends or growth forecasts.
- Evidence of Fire’s Impact: Connect the dip in revenue to the wildfire. Record the closure of your shop for repairs or any disruption to your supply chain.
In McKay v. State of California (8 Cal. App. 4th 937), a court allowed recovery of lost profits after a negligently set fire. If you can prove a specific link between the fire and your lost business income, you can seek that money.
Why Keep a Detailed Inventory?
An inventory lists every piece of stock, supplies, or equipment your business owns. You need that list to show what the wildfire ruined.
- Before the Fire: Keep up-to-date records of your inventory. If a disaster hits, you already know what you had.
- After the Fire: Update your records to show which items are gone or damaged, including their cost and approximate value.
Esgro Cent., Inc. v. General Ins. Co. (20 Cal. App. 3d 1054) highlights the importance of having a full inventory. Courts and claim adjusters often expect you to provide detailed lists of each item, quantity, and cost. That ensures you get a fair measure of what you lost.
Should You Track Temporary Expenses?
Yes. After a wildfire, you might rent a new space, buy special equipment to keep operating or spend money on cleanup. These are called mitigation costs or necessary expenses. You might keep your business running from another location, even if the fire destroys the main building.
- Keep All Receipts: Whether renting a storage unit or hiring extra help to remove debris, store every receipt.
- Track Additional Costs: Note the moving company bills if forced to move. Note those overtime costs if your employees must work more hours to fix things.
Expenses like these can often be claimed as part of your wildfire losses, especially if a corporate party is responsible for the blaze. But you have to prove what you spent and why it was necessary.
How Do You Handle Communication With the Potentially Responsible Party?
If a large entity (like a utility) caused the fire, their representatives might contact you. Be polite, but also be careful. Anything you say can later affect your claim.
- Stay Professional: Do not argue or accuse them on the phone or in emails without a plan.
- Consider a Lawyer: If they contact you for statements or to inspect your property, you might want a wildfire attorney present so you do not unintentionally weaken your position.
- Document Everything: Keep a record of calls, emails, or letters. Note dates, times, and what was said.
Should the matter go to court, these communications might become important evidence.
How Do You Handle Communication With Insurance Adjusters or Agents?
Even though we are not talking about insurance-only claims, you might still have a business policy that covers fire damage. If you choose to file a claim with that policy, keep these tips in mind:
- Cooperate, But Save Copies: Provide the information they request, but always keep duplicates of your documents.
- Follow Deadlines: Often, there is a time limit—like 60 days—to provide sworn proof of loss.
- Document the Process: If they waive certain forms, like the proof of loss, note that in writing. In cases like Elliano v. Assurance Co. of America (3 Cal. App. 3d 446), the insurer waived formal proof of loss because their investigation had already provided enough information.
Remember, if you are considering a lawsuit against a corporate party, your insurance coverage might only pay part of the total. A separate legal action can focus on the additional losses beyond your policy limits.
Do You Still Need to Submit a Proof of Loss if You Plan to Sue a Big Company?
While a “proof of loss” is often an insurance document, the idea behind it—providing detailed evidence of what was lost—still applies if you sue a corporate defendant. Even if you are not dealing with your insurer, you must show the court or settlement negotiators how much you lost and why.
- Be Thorough: List your property, equipment, and inventory, plus their values or costs.
- Highlight Additional Losses: Lost profits and extra expenses are not always part of a typical “proof of loss” form, but they matter in a lawsuit.
- Keep Deadlines in Mind: Courts might have timetables, especially if you must file documents or respond to discovery requests.
Whether your claim is with an insurer or in court (or both), thorough documentation remains key.
Is it possible for the company to waive formal paperwork?
Sometimes, a business or an insurance company might say, “We have everything we need. You don’t have to fill out that form.” That is known as a waiver. However, such a waiver must be very clear. If you rely on an informal statement that you “don’t need to do anything else,” you risk a denial later if they say you failed to submit the required paperwork.
Elliano v. Assurance Co. of America and other cases (like Francis v. Iowa Nat’l Fire Ins. Co.) show that courts generally want strong proof of a waiver. If someone tells you verbally that you don't need to complete a form, ask for that in writing.
Should You Bother Counting Smaller Losses?
Yes. Even if some items seem minor—like a few boxes of paper or small décor items—add them to your damage list. Those smaller costs can add up. Courts and insurers might ask for a thorough accounting of everything you lost, not just the large machinery or building structure.
If you do not show these smaller losses early on, it might be harder to add them later. Being detailed from the start can lead to a fairer compensation total if a corporate party is indeed found responsible.
How Do You Show That the Wildfire Caused the Loss?
You need to connect the dots between the fire and your damage. This is especially important if you suspect a utility or another entity’s negligence triggered the blaze.
Some tips:
- Obtain Official Reports: Fire departments or investigators often release findings on how the wildfire started.
- Collect News Articles: Keep stories about the fire’s cause if the media widely reported them as initial evidence.
- Local Government Data: The city or county might have records on the burn area.
If investigators determine that a big company’s broken power line or poorly maintained equipment ignited the wildfire, that is strong evidence for your legal case.
Can You Include Emotional Distress in Business Losses?
Courts typically consider emotional distress in personal injury claims or damage to a person’s home. With business losses, the main focus is usually on property damage, lost inventory, and profit losses. Emotional distress might not apply directly to the business entity, but if you are the sole owner, there might be a way to include certain personal impacts.
However, in many lawsuits against a corporate entity for wildfire damage to a business, the courts focus on financial harm to the company. That is why good profits, property, and inventory records matter so much.
Do You Need Professional Opinions?
Sometimes, yes. If the fire ruined your building equipment or specialized machinery, a professional can provide the following:
- Replacement Cost Estimates: They know current market prices.
- Valuation: If you have custom or unique equipment, a professional might explain its worth.
- Profit Analysis: An accountant or financialist can help show how your sales and profits may have grown if the wildfire had not occurred.
These professional reports can strengthen your documentation. For instance, if you run a tech firm with pricey servers, a server professional can explain how the fire impacted your data center in a way the average person might not understand.
How Do You Organize All This Information?
Staying organized is key. Here are some ideas:
- Digital Folders: Create separate folders for receipts, photos, inventory lists, and communications. Label them clearly.
- Hard Copies: Keep a physical binder with printouts of key documents, especially if your computer files might be lost or corrupted.
- Spreadsheet or Checklist: A simple spreadsheet can track each item or cost, the date of purchase, its value, and whether the fire damaged it.
Staying on top of your records helps you respond fast if lawyers, judges, or adjusters ask for more information.
When Should You Involve a California Wildfire Litigation Lawyer?
If you suspect a corporate or major party (like an electric utility) caused the wildfire, speaking to a wildfire attorney sooner rather than later is wise. A California wildfire litigation lawyer can:
- Investigate the cause of the fire.
- Guide you in documenting your losses in a way that meets legal standards.
- Negotiate with the responsible entity’s representatives.
- File or manage any lawsuit if they refuse to pay or offer a fair settlement.
Wildfire attorneys know the rules about lawsuits, evidence, and deadlines. They can keep you from making mistakes that can ultimately cost you money.
Is There a Chance to Settle Out of Court?
Yes. Many wildfire cases against large entities settle before trial. If you have strong documentation, you might negotiate a settlement that covers your losses without going through a full court process.
Negotiations can involve back-and-forth offers. A lawyer experienced in wildfire litigation can guide you in deciding if a settlement offer is fair. If you accept too little, you might not have enough money to rebuild or cover your lost profits. If you hold out too long, you risk a drawn-out legal fight. A balanced approach is key.
Contact a California Wildfire Litigation Lawyer Today
Ready to take the next step? Call 1-800-WILDFIRE and contact a California wildfire litigation lawyer today. They will listen to your story, review your documentation, and guide you in deciding the best way to seek the recovery your business deserves. You do not have to face the aftermath of a wildfire alone— legal help can guide you back to stability.