What wildfire coverage do small businesses need?
The California wildfires raged through parts of Los Angeles, particularly in the Palisades and Eaton areas. As of January 20, experts said the fires damaged more than 17,000 structures, many of them commercial buildings.
If you're a small business owner in an affected area, having a business insurance policy can provide you with critical coverage.
What's covered is dependent on the type of coverage you have:
- Commercial property insurance: Commercial property coverage protects your building, inventory, equipment and other supplies against damages. If your warehouse burns down or your property has smoke damage, commercial property coverage comes into play.
- General liability: General liability coverage protects against losses related to injuries that occur on your premises. For example, if a customer was injured on your property, general liability would help with your legal expenses and their medical bills.
- Commercial auto: If you have vehicles used for business, commercial auto coverage is necessary. But, for your policy to cover damages related to wildfires, you need to have comprehensive insurance, which covers damages resulting from a fire.
- Business interruption insurance: If your business has to close because of the wildfires — and stay closed while the fires are pushed back and your property can be repaired — business interruption insurance helps cover operating costs, employee payroll and some of your lost income.
- Business owner's policy: A BOP is a package of common coverages, such as general liability, commercial property and business interruption insurance.
What business insurance doesn't cover after a wildfire
If you have a business insurance policy, you may assume you're adequately covered; however, what your policy will actually reimburse you for depends on the coverage you have. Hiscox, a major commercial insurer, released a study in 2023 that found that 75% of small businesses were underinsured, and 70% of small business owners didn't understand what their policies covered.
If you don't have adequate coverage, you could be in for a costly surprise.
For example, you may have commercial property insurance. While that covers the cost of repairs or replacement of your property due to damages from the wildfires, it doesn't include coverage for lost income. If your business has to close during repairs, you could be unable to pay your employees (or yourself). Only those with business interruption coverage will receive reimbursement for lost income.
How to make a claim after a wildfire
To file a business insurance claim after a wildfire, follow these steps:
1. Contact your insurer as soon as possible. As soon as you safely can, get in touch with your insurer. Depending on the company, you may be able to start the claims process online, although some companies require you to call their claims department. Provide your policy number, the location of the affected property and your phone number and email. The claims department will schedule an appointment for you with an adjuster.
It can also be a good idea to meet with your agent to discuss your coverage.
"BOP and package policies throw in a lot of extra coverages, like coverage for signs and landscaping," said Rick Dinger, president of Crescenta Valley Insurance, which is located just outside Los Angeles.
2. Protect your property. When you contact the claims department, ask what steps you can and should take to protect your business. In some cases, you may need to make some repairs before the adjuster can get there; for example, you may need to replace broken or burned doors or board up broken windows until more permanent repairs can be made.
3. Take photos and videos. If it's safe to visit the property, take photos of all of the damage. And, if possible, take a video walking through the damage.
In general, you shouldn't remove any damaged property or debris until your adjuster has visited the property. But, if anything has to be removed because of safety concerns, take photos and videos first.
4. Meet the adjuster. Once the fire department and authorities have deemed your area safe, the insurance company will schedule a time for the adjuster to visit your property and assess the damage. If possible, try to be there when the adjuster visits to discuss the damage.
5. Collect documentation. Collect business records, such as your past profit and loss statements and receipts for damaged equipment. If you have business interruption coverage, make sure you also have past tax returns, monthly sales data or contracts to show your income.
6. Keep good records. Good records are essential. Keep receipts for any items you purchase to repair your business property, such as tarps, wood boards or tools. Also keep track of any invoices or receipts for services, such as debris removal companies.
7. Track the claim process. You can usually track your claim's status online through your insurer's customer portal, or you can contact your insurer for an update. Depending on the extent of your damages and your insurer, the claims process can take weeks or even months.
But at least one expert warns not to be in too much of a hurry.
“Moving too quickly or without the necessary assessment phase can be problematic,” says Matthew Blumpkin, Esq., president of the National Association of Public Insurance Adjusters (NAPIA) and CEO of the Greenspan Co., an adjuster which has offices in Los Angeles. “It is important to slow down. Properly evaluate the situation, understand what the policy will and will not cover, the documentation necessary to prove the loss and then ensure that the resolution from the insurance carrier is both fair and accurate.”
How can a small business get back to business while the claim is being processed?
While you're waiting for the insurer to process your claim and send you a check for your damages, you can explore other options for getting your business back on track.
For example, you could relocate to temporary premises and rent a workspace. Depending on the coverage you have, your insurer may reimburse you for some of your extra expenses.
What our expert says
Q: Should small business owners always push to get claims settled?

Sources:
- Moody’s Corporation. “Moody's RMS Event Response estimates insured losses” Accessed January 2025.
- J.P. Morgan Asset Management. “Will the Southern California wildfires impact the current economic expansion?” Accessed January 2025.
Wildfire insurance: Frequently asked questions
Are small business insurance claims related to wildfires subject to deductibles?
Yes, any small business insurance claims you submit related to damages from the fires are subject to your policy's deductible. Depending on your policy and the coverage amounts you chose when you purchased coverage, the deductible can be anywhere from $0 to $5,000 or more.
Can I hire an adjuster?
When you submit a claim, your insurance company will arrange for an adjuster to visit your property. However, you have the option of hiring your own adjuster, too. A public adjuster — an insurance professional that works on your behalf to settle the claim — values the damage, reviews your policy and presents your claim to the insurer. In some cases, a public adjuster may secure a higher settlement amount than you could get on your own.
But choose your adjuster carefully.
“Always verify licensing status and the experience handling insurance claim evaluations when considering options for representation,” says Matthew Blumpkin, president of the National Association of Public Insurance Adjusters and CEO of the Greenspan Co.
Will the Small Business Administration help me?
Currently, the Small Business Administration (SBA) is offering disaster loans to small business owners who operate businesses in certain counties. Depending on your business, you may be eligible for one of the following:
- Physical disaster loan: An SBA physical disaster loan is for businesses that need to repair or replace disaster-damaged property and equipment. Small and large businesses of any type can qualify, including non-profit and religious organizations.
- Economic injury disaster loan: These loans provide businesses with working capital so they can meet their normal financial obligations. These loans are for small businesses, small agriculture cooperatives, aquaculture businesses and non-profit organizations.