Organisations need to understand how bushfires could affect their operations, including any risk of starting a blaze, according to a report from Allianz Commercial.

They must then develop well-documented fire management plans that meet regulatory requirements.

The insurer says bushfires are occurring in places not previously regarded as significant risks, and seasons are starting earlier and lasting longer.

Human development is encroaching on country areas prone to fires, increasing the exposure of people and property, particularly in Australia and the US. Road and electricity networks continue to expand and are key ignition sources, the report says.

“Future severe fire weather, in southeastern Australia for example, will increase mainly during the spring and summer, due to a combination of low rainfall and humidity, high temperatures and higher wind speeds.”

Fire suppression costs pose an emerging liability risk, involving claims made against parties accused of causing or contributing to a blaze.

“There has been extensive litigation in the US and, to a lesser extent, Canada and Australia in relation to wildfires caused by electricity utilities and, in some instances, telecommunications companies and railway companies,” the report says.

There is also potential for class actions in Australia and the US when smoke covers large urban areas.

The report – Wildfires: A Growing Global Threat – outlines risk mitigation and loss prevention measures, and says sectors that are more exposed include:

• Utilities and energy
• Real estate and construction, particularly when demand for rebuilding increases costs and timelines
• Forestry and agriculture
• Transport
• Retail and services, including from reduced customer traffic and supply disruption
• Hazardous activities in wildland areas, such as companies conducting welding, cutting and other work on plant and equipment.

Global insured losses from wildfires increased from $US8.7 billion ($13.3 billion) in the 2000s to $US56.3 billion ($86.2 billion) in the 2010s, according to Swiss Re.

The Allianz report is available here.