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Read MoreOver the past three to four summers, the insurance industry has seen a significant increase in wildfire evacuation claims (also known as civil authority). The Insurance Bureau of Canada ranked the summer of 2024 as the “most-destructive season in Canadian history for insured losses due to severe weather,” [1] and beyond the destruction of property, these wildfires are causing losses from the related evacuation orders that expand the impacted area beyond where the fire is physically located. Numerous towns have been evacuated under the threat of fire from coast to coast, resulting in interruptions to businesses even without the usual necessity of physical damage. So far in 2025, there have been evacuation orders lasting as short as 24 hours and as long as 30 days or more.
As of July 2, 2025, there have been a recorded 2,672 wildfires in Canada—approximately 2% more than the historical 10-year average in the number of fires, but the severity and size of these fires is more than 200% above the 10-year average, with over 4.3 million hectares burning this year. [2]
The insurance industry is used to dealing with losses driven by physical damage, but what about those losses where there is no physical damage component for the insured party? This article explores some of the unique considerations for wildfire evacuation claims where the businesses suffer no physical damage. The following information may be of particular interest to claims adjusters and commercial insurance brokers.
While each policy is unique and comes with its own terms and conditions, there are a lot of commonalities between policies and insurers when it comes to what indemnity periods will be considered for a claim, based on the nature of that claim. In physical damage claims the indemnity period may be limited to either the resumption of business or when operations/sales return to “normal,” potentially subject to a maximum of 12 months, 24 months, or some other time limitation.
The indemnity limitations for evacuation claims can be more limited compared to physical damage claims. Claims may be strictly limited to the dates on which a formal evacuation order is in place. There is no margin for businesses choosing to close and evacuate prior to the official evacuation order or for those who take days beyond the end of the order to return to the area and resume operations.
The maximum indemnity periods available for evacuation claims are also much shorter, often capped at 14 or 30 days from the start of the order period, compared to the 12+ months a physical damage claim would be eligible for.
The size and location of the towns which have been most heavily impacted by the wildfire evacuations in the past few summers create some unique issues that must be considered when assessing the loss of revenue. When we are speaking about Canadian wildfires and the corresponding evacuations, many of the towns we are talking about are quite small and frequently located in more remote areas. Often these towns are heavily dependent on seasonal tourism to generate income, and the summer fire season also happens to be peak tourism season.
When examining the situation to identify potential losses, there are a few things to keep in mind:
Existing in between business interruption claims for physical damage and those related to wildfire evacuations, a third related but distinct set of claims can also arise—claims due to power outages. The damage to infrastructure resulting from wildfires can easily result in loss of power to businesses not otherwise directly affected by the fires or evacuations.
Many power outage coverages have distinct limitations worth noting:
Many insurers, when dealing with wildfire evacuation claims, are firm in the position that the indemnity period ends on the date the evacuation order is lifted, unless the claimant suffers physical damage. As a result, insureds who believe they are not fully compensated may attempt to position they are entitled to consideration of losses beyond the evacuation period. As such, it is worth highlighting some of the issues these insureds may face after an evacuation:
With the increase in size and number of wildfires in Canada each year, we expect to continue to see a rise in business interruption claims caused by wildfire damage or evacuation. As with all disasters, ensuring proper coverage prior to disaster striking is extremely important, and knowing what to look for when quantifying a loss can have a significant impact on the claim cost and the efficiency with which these claims can be handled. If you or your organization have concerns about these or other potential impacts of wildfires, be sure to reach out to expert forensic accountants who may be able to assist with planning and loss assessment before, during, or following a wildfire event.
We would like to thank our colleagues Juliet Brooks, CPA, CMA, DIFA, and Lisa Jackson, CPA, CGA, for providing insights and expertise that greatly assisted this research.
Juliet Brooks is a Vice President in J.S. Held’s Forensic Accounting – Insurance Services practice. She has worked in the insurance industry providing financial advisory services since 2008. With over 16 years of experience in damage quantification and investigative accounting, her expertise has been determining, verifying, and analyzing matters by examining accounting, operating, and financial records and interviewing various stakeholders. She is also experienced in interpreting and communicating these financial facts, calculations, and recommendations concerning litigation support and investigative insurance loss accounting services into easy-to-understand, unbiased, plain-language reports for various parties. Juliet is extensively involved in J.S. Held’s Canadian property insurance practice. She specializes in quantifying losses for commercial property claims. Based in southern Ontario, she actively handles claims from coast to coast, collaborating with several national insurers.
Juliet can be reached at [email protected] or +1 289 206 0730.
[1] “Summer 2024 shatters records for severe weather damage: Over $7 billion in insured losses from floods, fires and hailstorms”, September 24, 2024, Insurance Bureau of Canada, https://www.ibc.ca/news-insights/news/summer-2024-shatters-records-for-severe-weather-damage-over-7-billion-in-insured-losses-from-floods-fires-and-hailstorms
[2] National Wildland Fire Situation Report, July 2, 2025, Natural Resources Canada, https://cwfis.cfs.nrcan.gc.ca/report
[3] Government of Alberta – Fire Danger Rating, ESRI, CGIAR, USGS, July 8, 2025 - https://experience.arcgis.com/experience/0e45bd0ef9814d5e9ec3f87900a4cfe9/page/Wildfire-status?views=Fire-danger-rating
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