Agren Projects

Prescribed Fire Liability Insurance

The Challenge:

Fires have historically been an important component affecting ecosystems. Nearly a century of federal fire policies, coupled with a highly successful public awareness campaign using Smokey Bear, have essentially made fire suppression and prevention a national crusade. Expanded urban development into forested areas has made these efforts even more prominent. This prolonged effort to control wildfire, coupled with the lack of planned (prescribed) burning, has substantially increased the amount of both living and dead fuels in many of the Nation's private and public forestlands. The increased fuel loading has ultimately led to an increased risk of forest fires.

A key barrier to conducting more prescribed fire has been the perception of risk associated with conducting planned burns. A study conducted by Agren in 2001 considered nine different options to mitigate risk for prescribed fire. The report concluded that liability insurance covering prescribed burns is not readily available to the private sector. Liability concern has forced many small private businesses to discontinue their prescribed fire services.

Agren's Solution:

In 2002, the Iowa Bureau of Forestry and Agren partnered with USDA Risk Management Agency to develop an insurance product that would reduce the liability risks of private prescribed fire contractors. During Phase I, we built the foundation for constructing an insurance tool that would protect private contractors from personal liability when conducting prescribed burns. Tasks included facilitation of an expert panel meeting, conducting literature searches, developing a survey tool, gathering and compiling actuarial data from contractors, and developing a preliminary assessment of the data.

Private contractors and non-government organizations in nine states were asked to complete an eight-page survey about their prescribed fire practices and number of escapes. Included were the states of Oregon, Texas, Florida, Oklahoma, Missouri, Iowa, Wisconsin, Minnesota and Virginia. We had more than a 50% return rate to the prescribed fire survey. The written surveys were followed up with telephone surveys to obtain actuarial data on the frequency and severity of losses from those contractors who reported a prescribed fire escape. This information can be used by insurance companies to rate a liability insurance policy for prescribed fire contractors.

Phase II focused on developing and marketing a sample insurance policy and making a final assessment of the data. Information about the policy was provided to private insurance companies as well as private contractors and non-government organizations. We continue to seek out opportunities to work with insurance companies to offer liability insurance to prescribed fire contractors.

If you are a insurance company interested in providing prescribed fire coverage, please contact Tom Buman, Agren's President.