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Most pallet company owners have a disaster scenario they hope never happens. It could be a major fire or another event that shuts down production for weeks. While companies cannot prevent every disaster, they can take steps to minimize the damage and prepare for recovery.
California pallet companies do not have to look far to see how quickly a disaster can become a business interruption. In August 2024, a fire at a Modesto pallet yard burned approximately 200,000 wooden pallets. The fire spread to nearby businesses, tractor-trailers, power poles and transformers. Damage was estimated at $1.2 million, and wind carried embers into surrounding areas.
In 2024, CAL FIRE reported 8,110 wildfires, more than 1.07 million acres burned and 1,837 structures destroyed.
The cost of a disaster extends beyond physical damage. A pallet company can lose inventory, equipment, buildings and vehicles while facing lost production, customer commitments and continuing expenses. The challenge becomes keeping the business operating during recovery.
Start With an Annual Review
A disaster plan should not be something pulled off a shelf after a loss. An annual insurance review is a practical starting point for keeping it current.
Businesses change every year. New equipment, additional buildings, increased inventory or larger customers can create new insurance needs or leave existing limits inadequate.
The annual review should address several questions:
- Are buildings and equipment insured for today's replacement costs?
- Have equipment or inventory increases changed coverage needs?
- Are business income and extra expense limits adequate?
- How long could the company operate during repairs?
- Have deductibles, exclusions or special limits changed?
- Are flood, earthquake, wildfire and wind exposures addressed?
These are business continuity questions as much as insurance questions. If a fire takes a building out of service tomorrow, how long can the company continue paying employees and serving customers?
Understanding the available insurance protection is equally important.
Property insurance protects buildings, equipment and inventory against covered losses. Business income insurance can help replace lost income and continuing expenses when a covered loss interrupts operations.
Extra expense coverage can help pay for temporary facilities or rented equipment. Equipment breakdown coverage addresses certain mechanical or electrical failures, while ordinance or law coverage can help meet additional rebuilding costs required by current building codes.
Knowing what is covered, what is excluded and where potential gaps exist is essential before a loss occurs.
One Advisor. One Conversation
When disaster strikes, owners should not have to spend valuable time figuring out who to call. Having one trusted insurance advisor who understands the company's operations can make a difference.
That relationship should begin long before a claim. An advisor involved in annual reviews becomes familiar with the company's buildings, equipment, customers and growth plans. This knowledge helps connect the insurance program with the continuity plan.
For example, adding a production line, increasing inventory or expanding into another building should trigger two questions: Does the insurance program need to change? Does the continuity plan need to change?
Keeping those conversations together helps prevent important details from falling through the cracks.
Organization matters, too. Current insurance policies, contact information, equipment records, financial information and continuity plans should be kept in a secure location away from the primary facility. Everyone should know whom to contact following a loss.
No insurance policy can prevent a fire or stop a windstorm. But the right coverage, combined with good risk management and a practical continuity plan, can make the difference between a temporary setback and a devastating interruption.
For pallet companies, preparedness starts long before the emergency. Review the risks, update coverage, identify gaps and build a relationship with one trusted advisor who understands the business.
Awareness is preparedness. Preparedness gives a business a better chance to recover when the unexpected becomes reality.
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October 2026