Northern Californians in Napa Valley were hit early Sunday morning with a 6.0 earthquake that caused substantial damage. The earthquake is one of the largest for the region in more than 25 years and was felt well into the Bay Area, with reports that the earthquake was felt as far as San Jose – waking residents in the San Jose region. The Governor declared a state of emergency and Napa residents and businesses are busy assessing the damage. Early photos and footage of the area shows significant structural damages to many businesses in Napa’s downtown region. By early evening, 33 structures had been red tagged, more have been yellow-tagged (which means it safe only to retrieve possessions) and it is unclear if that number will grow as government entities continue to survey the damaged areas.

We tend to think of Napa as winery fields and a local vacation and tourist draw, but footage of the damage has reminded Californians the reality of a large magnitude earthquake shaking the region, the importance of being prepared for a disaster, and more than that — having earthquake insurance to help us pick up the pieces after. In California, earthquake insurance must be purchased separately from a normal homeowner’s or business insurance policy. Many who suffered damage from this earthquake will not have earthquake insurance coverage. In California, it’s reported that only 15% of the general homeowner’s population purchases earthquake insurance. Many businesses, however, will have such policies to help them in this time of recovery.

Napa Valley is the largest hub of the wine and wine tourist industry in California. This means businesses and residents in the region that surround and support the wine industry will see substantial decrease in tourism and business earnings. The Napa wineries may also discover that although their vineyards remain intact, a large earthquake will impact their current and future bottom line and daily business. Wineries are not run on vineyards alone, and there are complicated storage and mechanical refrigeration issues as part of the daily running of a winery that will affect the winery if damaged or interrupted.

Damage to wine already bottle and stored, lost from the earthquake, can be easily calculated. However, there are other matters less obvious that must be taken into consideration. We are in the middle of summer and if power and cooling issues occur for wineries, the whole batch coming to market may be compromised. The earthquake’s impact on current and future income loss and business interruption must be carefully and properly reviewed when the winery’s loss is calculated for insurance purposes. If production is interrupted and winery employees are unable to work, those wineries must still pay employees and access their insurance’s extra expense to keep their businesses afloat.

Residents in Napa who live and support the tourist and wine industry may feel the adverse impact of this earthquake for a substantial period of time unless local businesses and wineries are able to access their insurance policies to quickly get their businesses back running. California is no stranger to earthquakes and those who have suffered a substantial earthquake loss know it’s a long road to rebuild and get back to pre-loss life; having that earthquake policy can be the difference of rebuilding or not.