Is Smoke Damage Covered?
For wineries whose vineyards were untouched by flame, there is still the threat of smoke damage. Microscopic smoke particles can taint the grapes and make them unfit for wine production.
By and large, Napa and Sonoma vintners had already harvested a large percentage of their grapes for the year by the time the wildfires were sparked in early October, experts say. But some heavier red grapes, such as those used to make cabernet sauvignon, were still on the vine.
Since most property and business interruption policies often have express exclusions for growing crops, winemakers’ best resource for coverage of smoke damage is government-backed crop insurance. According to experts, to support a claim a winery must enlist the services of an independent or contracted laboratory to test for chemical indicators of smoke taint before harvesting the affected grapes.
While seeking coverage for grapes lost to smoke damage within the policy period should be fairly straightforward, questions may arise as to whether future problems with grape cultivation due to the wildfires are part of the same single occurrence or constitute a separate occurrence implicating coverage under later policies, experts say.
"Short of burning completely, some vines may have sustained smoke damage, which could taint the future production of grapes for years,” Anderson Kill PC shareholder Dennis Artese said. “Coverage for smoke-taint-related losses in later years may come down to whether such losses are found to have resulted from a new occurrence in a later policy year under a continuous trigger or other theory."
To read the full article: 5 Key Insurance Questions For Wineries Hit By Wildfires