The Conventional Wisdom
Business continuity managers often treat smoke as a localized event. You might write a plan for a specific building fire, designate a backup site across town, and assume your insurance covers smoke damage like it does fire. You may believe that if smoke becomes an issue, you'll just close for a day or two, clean up, and reopen.
This approach worked when smoke was limited to a kitchen fire in your facility or a nearby warehouse blaze. The event had clear boundaries, and the damage stayed contained. Your plan could focus on a single location, and your policy language didn't need much scrutiny because smoke claims were rare and straightforward.
Why This Approach Falls Short
This model fails when smoke becomes a regional issue. When Canadian wildfire smoke blanketed large parts of the US, businesses far from any fire found their continuity plans inadequate. The backup site was under the same haze as headquarters. Employees couldn't escape the smoke by going home. Suppliers in the region went silent simultaneously. The open-or-closed binary that most plans rely on became useless when businesses could technically operate but saw revenue drop as air quality kept customers indoors.
Rob Hoover, senior vice president and risk advisor at Brown & Brown, explains: "A smoke event can blanket a whole region for days, sometimes weeks. It hits your headquarters, your backup site, and your employees' homes at the same time. So 'we'll just work from the other office' falls apart when the other office sits under the same haze."
Coverage assumptions are equally flawed. Many businesses assume smoke damage is covered under their property policy without checking. Some policies cover smoke claims, while others exclude them. Carriers adjust policy language at renewal, and smoke coverage that existed last year can quietly disappear from the current policy. Most policyholders don't catch the change until they file a claim.
The Evidence
The EPA's Air Quality Index classifies fine particulate matter (PM2.5) above 150 as unhealthy for the general public. States like California have incorporated this threshold into workplace protection rules for outdoor workers. When air quality crosses that line, outdoor work stops, foot traffic drops, and businesses that rely on in-person operations start losing money whether they stay open or not.
Smoke clogs air filters, which strains HVAC systems. A strained system can fail, shutting down operations as effectively as flames would. Hoover's team handled a seven-figure claim after exhaust smoke entered a luxury apartment building with no fire and no structural damage, but extensive and costly remediation.
Revenue exposure extends beyond cleanup costs. Businesses that stay open might operate at 60 percent capacity while smoke keeps customers away. A continuity plan that doesn't account for partial operation will miss that revenue leak entirely.
What to Do Instead
Start by rewriting the scenario your plan addresses. Stop planning for a disaster that hits one address. Run a tabletop exercise where smoke blankets your entire region for two weeks. Walk through it with your leadership team. Where does the money leak first? Which supplier goes quiet? How many days can you operate at 60 percent capacity before it hurts?
Your plan should address five elements specifically:
Employee health protocols during poor air quality periods. Define the air quality threshold where outdoor work stops. Identify roles that can't function remotely and what protective measures you'll provide for employees who must work on-site.
Indoor air quality controls. Confirm whether your HVAC system can maintain breathable air during an extended smoke event or whether it just recirculates the problem. Smoke clogs filters, and a clogged filter can trigger a shutdown faster than most managers expect.
Remote work options where the job allows. Regional smoke doesn't care about your backup site location. If your employees can work remotely, document which systems and access they'll need before the event starts.
Customer communication strategy. When air quality drops, foot traffic follows. Decide now how you'll communicate service changes, whether you'll offer delivery or pickup alternatives, and how you'll maintain customer relationships when in-person contact isn't safe.
Pre-event broker conversation to pressure-test policy response. Sit down with your broker before renewal, not after a loss. Ask directly how the policy responds to a smoke event. Ask what conditions trigger coverage. Ask what has changed since the last renewal. Get those answers on record.
The risk assessment starts with people, then works outward. Ask the blunt question first: if the air outside turned dangerous for two weeks, who on your team can't or shouldn't do their job? Then follow the money and the machinery. Which parts of your revenue depend on people showing up in person or working outdoors? Could smoke damage inventory or sensitive equipment? Would your key suppliers get hit at the same time you do?
This assessment applies regardless of geography. A large industrial fire or exhaust smoke from a neighboring operation can produce the same outcome as a distant wildfire. Businesses that plan for smoke year-round rather than only during wildfire season recover faster.
When the Conventional Wisdom Is Right
The single-location model still works when smoke is truly a single-location event. A kitchen fire in your facility or a blaze at a neighboring building can create disruption that fits neatly into a traditional continuity plan. Your backup site will function. Your employees can relocate. Your insurance coverage will likely respond without ambiguity.
The conventional approach also holds when your business has no outdoor operations, no customer foot traffic, and no dependence on in-person work. If you can operate entirely remotely and your revenue doesn't depend on physical access, regional smoke becomes a health issue rather than a continuity crisis.
But if your business depends on people showing up, working outside, or customers walking through the door, the old model won't protect you. Sort out your plan before the smoke arrives and confirm what your policy actually says. Finding out during a claim is an expensive way to learn.
