Emerging Litigation Podcast – Episode Summary

Podcast: Emerging Litigation Podcast
Episode: Wildfire Insurance Coverage for Homeowners and Businesses with Anderson Kill
Date: January 16, 2025
Host: Tom Hagy
Guests: Dennis Ortiz, Marshall Gilinsky, Joshua Gold (Anderson Kill)

Overview

In the midst of one of Los Angeles’ most devastating wildfire seasons, host Tom Hagy convenes three experienced insurance litigators from Anderson Kill to provide urgent, practical guidance on wildfire insurance. The episode is geared toward homeowners and commercial policyholders navigating immediate and long-term claims after catastrophic loss. The discussion explores what coverages are available, common policy limitations, practical tips for claim navigation and preservation of insurance rights, and intricate issues around business interruption and smoke damage claims.

Key Discussion Points & Insights

1. Scope of Coverage for Wildfire Losses

[03:15]

• Commercial Perspective (Marshall Gilinsky):

  • Two main facets covered: (1) Damage to property, and (2) Business interruption losses.
  • Business interruption can also be triggered by supplier/customer loss, not just damage to the policyholder’s premises.
  • Smoke-related interruption is considered a “physical loss” and triggers coverage:
    “The question of whether interruptions to business as a result of smoke related issues constitute physical loss or damage that triggers coverage. The answer to that is yes.” – Gilinsky

• Further Commercial Perspective (Dennis Ortiz):

  • Beyond building & business interruption, many “dozens” of additional coverages exist, such as ordinance or law coverage (often crucial for older buildings needing code updates after disaster), debris removal, etc.
  • Importance of careful review to not miss these ancillary protections.

• Homeowner Perspective (Dennis Ortiz):

  • Coverage includes: Dwelling, “other structures” (e.g., detached garages), personal property, and loss of use/additional living expense.
  • Immediate needs: AL coverage pays for temporary housing and added living costs, but may involve practical difficulties (e.g., finding rentals).
  • Essential to document every expense:
    “Maintain your receipts, any kind of food expenses that you incur because you couldn’t cook at home, make sure you’re keeping close track of that and submit those to your insurance company.” – Ortiz [05:53]
  • If temporarily with family, consider entering into a lease for documentation.

2. Policy Limitations & Sub-Limits

[07:29–11:56]

• Homeowners:

  • Sub-limits exist for valuables: jewelry, electronics, fine arts, etc.
    “Homeowners may be looking at sub limits for certain types of property, electronics, jewelry, fine arts, any kind of special or customized furnishings… so they should be aware of that.” – Gold [07:32]
  • Weigh actual cash value vs. replacement cost vs. enhanced/guaranteed replacement policies.
  • Policy variations can be enormous—never assume; always check specific policy terms.

• Commercial:

  • Standard dollar limits; sometimes margin or escalation clauses provide a bit of a cushion if coverage is understated.
  • Different policies have widely diverging “bells and whistles”—again, always verify.

• Getting Your Policy Documents:

  • Policy documents may be destroyed or inaccessible; request them from your agent, broker, or insurer as soon as feasible.
  • Some policies have more robust packages, especially those for high-net-worth individuals or commercial policies bought through brokers.

• Critical quote:
  “One thing to remember in all of this is not to make any categorical assumptions about what is covered, what is not covered. There’s a lot of variation…” – Gold [09:28]

3. Navigating the Claims Process

[12:56–17:56]

• Prompt Notice:

  • Notify your insurer as soon as possible; most policies require “prompt notice.”

• Claims Adjusters:

  • High volume of claims means adjusters may change; document everything in writing.
  • Hold insurers to their obligation for prompt, fair adjustment despite the disaster’s scale.

• Documenting the Loss:

  • Hire a reputable public adjuster to advocate for you, especially for complex or high-value claims.
  • Insurance company “independent” adjusters work for the insurer.
  • File a proof of loss promptly—pay close attention to deadlines (may be as little as 30 or 60 days).
  • For deadlines you cannot meet, get written extensions or file a partial proof to preserve your rights.
  • Be vigilant about suit limitation clauses—contractual periods can be shorter than legal statutes of limitation, sometimes only 1-2 years post-loss.

• Valuation and Disputes:

  • Do not wait for the insurer’s valuation—present your own thoroughly documented loss.
  • If disputes arise, consider “hostile proofs of loss” to trigger further insurer action, and prepare for alternative dispute resolution or, ultimately, litigation.

• A Human Angle:
  “I mean, just, you know, a friend sent me a photo of her house. I mean, she literally was watching it burn during the day and then... I don’t know how a person does it, how an individual navigates it.” – Hagy [18:36]

4. Emotional & Practical Challenges for Claimants

[18:36–23:21]

• Immense Burden:

  • Homeowners face the almost impossible task of itemizing all personal property. Use photos, videos, and memory as aids.

• Professional Help for Businesses:

  • Businesses generally have a risk manager or similar professional; individual policyholders do not, making support even more necessary.

• Resilience:

  • “Don’t underestimate the power of human fortitude... The people I talk to are determined... they know exactly what they need to get done, and they’re determined to get it done…that determination is essential when you’re processing these claims.” – Gilinsky [20:49]

• Unforgiving Claims Process:

  • Courts uphold insurance fine print even after disasters; missing deadlines or requirements can result in losing coverage.

5. Business Interruption & Smoke Damage Claims

[23:43–30:17]

• Physical Loss Trigger:

  • “Direct physical loss or damage” requirement generally satisfied by smoke/soot/ash—not just visible fire damage.

• Case Law:

  • Oregon Shakespeare (2016): Held that wildfire smoke at a theater constituted physical loss triggering business interruption.
  • California Supreme Court (COVID cases): Distinguished smoke (covered) from COVID (not covered) as physical loss.
  • Bottega v. Chicago: Recent case (N.D. Cal., Jan. 2025) confirms smoke damage from wildfires is physical loss triggering business interruption.
  • “Anyone who’s being told…that smoke doesn’t cause physical loss or damage should ignore that, that feedback. That’s wrong. And the judge in California said…that’s wrong.” – Gilinsky [26:51]

• Types of Business Interruption Coverages:

  • Traditional business income/business interruption
  • Civil authority (when government closures impact operations)
  • Ingress/egress, contingent business interruption (loss at suppliers, customers, or nearby attractions)
  • Service interruption (utility losses)
  • Deductibles and sub-limits often apply and differ by policy.

• Attraction Property Coverage:

  • E.g., hotels reliant on nearby attractions or geographic features—if the broader area is impacted (not just the insured location), coverage may still apply.
  • Multiple coverage extensions may provide overlapping or additional protection.

• Key reminder:

  • “If your business itself did not actually sustain physical loss or damage, that does not mean that you’re not entitled to coverage…If you lose revenue or profit because of damage in your surrounding area, there may be a coverage under which you could recoup those lost profits.” – Ortiz [31:48]

6. Final Thoughts & Support

[32:23–33:13]

• Supportive Closing:

  • Anderson Kill’s message: Victims have the support of a nationwide community, legal experts, and practical advocates to help them through the insurance labyrinth after catastrophe.

• Closing quote:
  “…It’s important to know that there is a community…that is watching and feeling and caring about what’s going on, and that we’re here to help. We are these insurance geeks who happen to know a whole lot about how to move insurance claims forward. So we’re happy to help in that way, but we’re there on an emotional and just support level also…” – Gilinsky [32:23]

Notable Quotes & Moments

• On Reviewing Policy Details:
  “Do not make any categorical assumptions about what is covered… There’s a lot of variation on the property insurance side, even more so I would argue in the commercial space.”
  — Joshua Gold [09:28]

• On Resilience:
  “Don’t underestimate the power of human fortitude... determination is essential when you’re processing these claims and working with insurance companies.” — Marshall Gilinsky [20:49]

• On the Emotional Toll:
  “…what a difficult process that will be for them to go in and itemize all of their personal property losses... there’s just this huge emotional component to it that should be considered as well.” — Dennis Ortiz [20:02]

• On Smoke Claims:
  “Anyone who’s being told…that smoke doesn’t cause physical loss or damage should ignore that, that feedback. That’s wrong. And the judge in California said…that’s wrong.”
  — Marshall Gilinsky [26:51]

Timestamps for Key Segments

• Wildfire coverage basics (homeowner & commercial): 03:15–06:42
• Key coverage limitations & sub-limits: 07:29–11:56
• Claims process best practices: 12:56–17:56
• Emotional/practical challenges in claims: 18:36–23:21
• Business interruption & smoke damage claims: 23:43–31:48
• Final thoughts and support: 32:23–33:13

Conclusion

This episode provided immediate, essential legal guidance for policyholders affected by the Los Angeles wildfires. The experts advised careful policy review, documentation, and persistence in pursuing claims, highlighting the complexity and emotional strain but also offering strategies and hope for navigating recovery. Their detailed analysis of recent smoke damage case law, policy sub-limits, and procedural deadlines is invaluable for anyone facing insurance issues post-disaster.