The San Francisco-based utilities company PG&E has filed bankruptcy to protect itself from liability for wildfires in Northern California in 2017 and 2018, including the Camp Fire last November. The biggest power utility in the country with listed assets of $71.39 billion and liability of $51.69 billion employs 24,000 people and provides services to 16 million customers. As is usually the case with Chapter 11, the company plans to pay all its suppliers of goods and services it receives after the filing.
New liability costs force the issue
The straw that broke the camel’s back was the Camp Fire that started November 8. This was the deadliest and most destructive wildfire in history, killing 86 people and devastating towns and property. According to insurance experts, reinsurance company Munich Re called the fire the most expensive in the world with a price of $16.5 billion. If the equipment from the utility were found as a reason for the fire, liability would go well beyond the insurance coverage it carried.
Not at fault could still mean liability
Despite its equipment not being the cause of fires in wine country in 2017, the PG&E still faces multiple suits for damages to individuals and businesses because of property that was burned. While lawmakers allowed utility to raise rates in 2017 to help with liability, this does not appear to be solution in 2019. The company previously filed bankruptcy in 2001 as Pacific Gas and Electricity Company.
Attorneys can help with claims
Whether the client is in dispute with their carrier or is attempting to get damages from the utility, attorneys can provide knowledgeable insights into these issues as well as others regarding insurance law, business litigation and liability. It is also worth noting that the bankruptcy could also set deadlines for claims, which means it is best to address these matters as soon as possible.