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As climate change destroys natural landscapes, Larry Chasin, CEO of PAK Projects, reveals how wineries that need land to produce products must find new ways to ensure coverage against weather disasters.
“If you are able to secure coverage, especially in areas where there is a history of wildfires, there are very few options for property coverage these days,” he said.
In an interview with Insurance Business, Chasin discussed how wineries can secure the necessary coverage in a tough market and how brokers and insurers can prepare a client for a worst-case scenario.
Finding solutions in times of trouble
One of the most alarming developments in the climate crisis is the frequency of extreme events.
“As insurers, we target these as 100-year events or 500-year catastrophic events,” Chasin said. “Every passing loss event is now called a once-in-a-lifetime disaster, but we hear it every year now.”
Secondary risk events, such as forest fires that threaten wineries, drive large losses to businesses and insurers.
“Carriers are taking billions of dollars in losses because of these disasters, and they’re happening in places that have never faced these serious issues before,” Chasin said.
“We are now witnessing unprecedented exposure, poor selection and inadequate rates,” the CEO said.
In addition, properties with a significant property value, especially those with special wine barrels for aging wine, create an easier opportunity to obtain coverage.
“In the past, they could go to one insurance carrier to cover the entire exposure,” Chasin said.
“And you see agents having to go to four or five, six different carriers to provide enough limits to cover what their exposure is.”
This makes claims more complicated when a loss event occurs, as multiple claims adjusters must visit a site to assess damages, especially when coverage is purchased from the excess and excess market.
“It can get very complicated, very quickly,” Chassin said.
Minimize potential losses or headaches with the help of a broker
According to Chasin, it is very important for brokers to maintain constant communication with an insured and stay updated on risk mitigation and prevention techniques as they become available.
“We found that providing truly relevant claim scenarios is a great way to make insurance think about risk management and loss prevention in a different way,” he said.
Avoiding a doomsday scenario starts with ensuring the right form of coverage for a business, to avoid uncovered losses.
“Those are the events we all worry about, limiting any surprises that can catch a client,” he said.
This results in constant work with insurers to assess the client’s value incorporating new additions and necessary property upgrades.
Insurers have more insight into how to create a protective space to protect an operation for damages that can be avoided or recovered from more easily.
However, there is also a communal aspect to protecting the fertile soil of a winery.
“If I do everything in my power to protect my property from damage, but the adjacent winery doesn’t, that still creates a greater opportunity for loss,” Chasin said.
“The ability to come together as an industry or as a community and try to deal with these things from a bigger perspective is something that I’m witnessing happen more often.
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