Even after the wildfires ravaging the Los Angeles area finally are extinguished, the resulting litigation between insurers and victims of the fire will likely take a long time to sort out, McGuireWoods Century City partner Kirk Pasich told American Lawyer Media’s Law.com in a Jan. 13, 2025, story.
Law.com reported that insurance lawyers expect a surge in litigation and possible changes in California’s insurance market, which already was shedding insurers due to wildfire risk. Financial losses are estimated to reach up to $20 billion, making it California’s most expensive disaster ever.
Pasich, co-leader of McGuireWoods’ insurance recovery group, told Law.com that lawsuits filed because of wildfires tend to fall into two categories: those directed at entities that may be blamed for starting the fires and others against insurers from people whose insurance claims are denied. In the Los Angeles area, Pasich said, there are “different fires with different possible causes,” at least 180,000 people subject to evacuation orders and numerous businesses destroyed.
“It is the kind of thing that you anticipate a lot of litigation coming out of,” said Pasich, who represents insureds in disputes with insurers and insurance brokers.
In addition, Pasich said, the loss of business income could lead to a surge in business interruption insurance claims.
“This may be small by comparison to people who have lost their homes. But there are business interruption claims that come out of the inability to do business and the lost profits, not just the physical damage, but your loss of business income,” he said. “We may end up seeing a wave of claims filed by businesses who say, ‘Not only was my store destroyed, but I lost the revenue I would have gotten over the next year or two.’ A number of concerts have been canceled and those folks lost money.”