Once viewed as a risk confined to hotter climates, wildfires are now an increasingly real threat in the UK; 2025 was the worst year for wildfires on record, with the highest area of affected land since records began – including the first UK ‘megafire’.
Recent summers have brought prolonged periods of hot, dry weather, with a growing risk of wildfire outbreaks. For businesses, wildfires are a visible reminder that climate-related disruption is no longer a rarity. Even if your premises are not in the immediate vicinity, the wider effects can be severe - and sudden.
The unpredictability of wildfire occurrence and spread means a proactive approach is needed, combining insured measures and practical risk mitigation.
How can wildfires impact organisations?
The impact of a wildfire can extend far beyond direct physical damage. Organisations may experience:
- Temporary closure due to evacuation orders or safety concerns
- Reduced access for employees, customers or suppliers because of road closures
- Supply chain disruption affecting stock availability and deliveries
- Utility outages impacting power, communications and IT systems
- Smoke contamination affecting operations, human health, machinery and stock
- Loss of revenue and/or increased costs whilst operations are interrupted
Insurance considerations for organisations
Reviewing your insurance programme regularly is critical to ensuring your organisation is appropriately protected as wildfire risk evolves. Key areas to consider include:
Business Interruption Insurance
Business interruption insurance helps protect your organisation’s finances if you are unable to trade after an insured event, such as a fire or other major incident. As well as loss of income, it can cover increased costs and, depending on the policy, other additional expenses such as working from a temporary site, using alternative suppliers, or paying overtime to keep the organisation trading. Some policies can also be extended to cover non damage exposures, such as denial of access, where a competent authority prevents or restricts access to your premises due to a nearby emergency.
It is important to review these provisions regularly to check that sums insured remain adequate, and that any limitations on distance from your premises reflect your key access routes and local risk areas. Most importantly, make sure your indemnity period accurately reflects how long it would take your organisation to recover.
Commercial Combined Insurance
Commercial combined insurance provides cover for loss or damage by fire (including wildfire) as standard, covering buildings, contents, premises and stock. However - other than for certain organisations - these policies usually exclude land and assets such as forestry, moorland or other open areas.
Organisations should understand exactly what is and isn’t covered, and to consider whether separate or additional protection is needed.
Parametric Insurance
Parametric insurance is an emerging type of cover that uses real time environmental data to trigger automatic pay outs when agreed conditions are met. It pays a fixed amount when a parameter, such as burn radius, crosses a set threshold. For wildfires, satellite data can monitor such thresholds and funds are released once the burn radius has been triggered.
Whilst premiums and limits currently mean this cover is more accessible to larger organisations, it is a rapidly developing area. As climate risks grows – and the market evolves – now is a good time for organisations to consider whether parametric insurance could complement their existing risk management and resilience strategies.
Beyond insurance: Strengthening business continuity and resilience
Insurance is only one part of an effective risk management strategy. Organisations also need a broader view of continuity planning to make sure their organisation can continue to operate through disruption.
This starts with understanding your supply chain and understanding who your most crucial suppliers are, how exposed they are to climate related disruption, and what contingency measures are in place - whether that be alternative suppliers, routes, or key materials and services. Therefore, if one link in the chain fails, your business is not forced to stop trading.
For employees based in the workplace, employers should ensure sensible preventative measures are in place; good ventilation, clear escape routes, and simple protocols to reduce exposure to ongoing damage or hazardous conditions.
Clear crisis communication is another essential element of continuity planning. There should be agreed communication plans for employees, customers and other stakeholders, with defined channels and responsibilities. Emergency contact details should be kept up to date and be easily accessible.
Where insurance is limited or unavailable, the focus should shift to practical mitigation to reduce the likelihood and impact of future events. A simple cost/benefit analysis of your insurance spend versus the probability and severity of different scenarios can support more pro-active risk management - helping you identify where it adds most value.
A simple resilience “health check” could be helpful. For example:
- Can we operate remotely if our premises are inaccessible?
- Do we have a crisis communications plan in place?
- Have we assessed the resilience of our key suppliers and logistics partners?
- Are staff adequately protected and supported during periods of extreme heat or poor air quality?
- Does our insurance programme and continuity plans reflect the risk exposures we face today?
Are your wildfire arrangements fit for purpose?
If you are unsure whether your current insurance and resilience arrangements remain suitable for your organisation, we’d be happy to discuss your requirements. We can help identify any gaps – and ensure your cover and continuity planning reflect your current business needs.