Fire has recently destroyed numerous business properties and completely shutting down their business operations. The damage is extensive. Almost like death, it is eerie to see businesses in full operation one day are totally stopped the next day.
Flames tore through the Great Smoky Mountains, killing at least three people, scorching hundreds of homes and businesses and sending more than 14,000 fleeing from the resort towns of Gatlinburg and Pigeon Forge.
Tourists and residents scrambled Monday night and early Tuesday to outrun the blaze, which was pushed from the Great Smoky Mountains National Park into the towns by wind gusts of almost 90 mph. Drivers navigating narrow mountain roads shot video footage showing flames swooping in from the shoulders of the roadway at the height of the evacuation.
Real people have their livelihoods at stake in the fire. It is easy to think about businesses as being corporations or conglomerates with large bank accounts and extensive assets. The reality is that even the largest corporations are owned by individuals, “real people” who invested their money to make a profit. While smaller business enterprises are those we tend to think about suffering from with the loss, fire affects all of them.
Most of the business insurance policies we see contain some coverage for loss of business operations. The insurance for loss of income is generally limited in scope, but it is present in a lot of commercial insurance products. The purpose being to aid the insured customer in the event the profit making functions of the company are suspended due to a calamity.
Photographs and news video show all types of companies affected by the fire including apartments, condos, motels, restaurants, stores, shops, art galleries, convenience stores, malls, dry cleaners, car dealers, accountants, and nearly every kind of business you can imagine. All of these companies are going to suffer from the loss of income. Some of these businesses will not survive and their doors will never open again.
The more fortunate companies will have adequate insurance to allow them to recover and resume business with time. Fire damage is far more complicated to a business than just the physical structure and the contents. It is normal to think of the burned parts of the building or the damage to what’s inside. But, when it comes to a business, just having your facility rebuilt doesn’t account for the loss of revenue while the business is closed. Those with suitable insurance are more likely to survive than those without. It is plain and simple economics.
One factor in a large scale event that covers almost 14,000 acres is the increased demand for labor and materials. All of the immediate building materials and supplies in the local geographical area are taken and used within weeks, if not days. The supply chain is stressed to the point there simply isn’t enough materials to make all the desperately needed repairs.
Likewise, the construction contractors in the area suddenly have far more work than they can handle. Construction workers are placed in higher demand, thus driving up labor costs. The bottom line is the cost of rebuilding is more expensive than it would normally be to build the identical property if the fire had not occurred.
While it make sense to expect that construction workers and contractors will come from around the country, there is still added expense. These individuals will need places to stay, eat, and live while the repair and rebuilding is underway. Travel accommodations and increased living expenses must be factored into the overall expense. Ultimately the cost of construction will increase for a time in parts of the country with catastrophic damage.
The affect of this fire will likely take years before things return to normal. The fire was so extensive that the fundamental infrastructure may cause delays. Large motels, condos, apartments, and buildings of any size take a year or more to design, plan, permit, and build under normal conditions. The lingering impact to the community will exist for a long time.
The conditions also set the stage for increased business for the courts, arbitrators, mediators, and attorneys. Disagreements over the amount of loss from the business interruption, policy limitations, insurance coverage, exclusions, the amounts of actual damage, and other issues may result in the need for attorneys with insurance experience. Although the vast majority of the insurance claims will be settled amicably, the odds are that a few will find their way to litigation.
Attorneys engaged in fire and insurance claims are found at all stages for the claim process. Business owners may seek legal advice in filling out proof of loss forms and making claims. Insurance adjusters may need coverage counsel to analyze insurance policies for coverage questions. The use of attorneys in fire claims is necessary in many respects. Fire claims can be complicated and a fire this large will bring all sorts of issues.
Business interruption claims are sometimes the first issue to rise to the dispute stage. The lack of incoming revenue sinks in pretty quickly to the average business owner and the insured customers will begin contacting their insurance agents or brokers about the need for immediate funds. Those not receiving the answer they want to hear may look for suitable legal counsel to assist them.
The effect of this massive fire is devastating and the impact to the community will be long lasting. But, Americans always rise up to meet and overcome the obstacles that come their way!