Finding the Right Insurance for Your Brewery
(Getting protection has never been easier)
The number of microbreweries, craft breweries and brewpubs in the U.S. has exploded in the last decade or so, bringing a whole new level of anxiety to the Saturday morning beer run. Today there are over 2,300 breweries or brewpubs in the U.S., and each one is as unique as the one across the street.
Manufacturing and Hospitality Risks
Having your own brewery isn’t all free beer and endless cargo shorts. There’s also a number of risks involved relating to the manufacturing of beer, any food or drink you sell, brewery tours, on-site events and more.
The specifics of your brewery insurance plan depends on the type of brewery you operate (large brewery, microbrewery, craft brewery, etc.) and whether you offer a tasting room, restaurant, pub, or other on-site operations like axe-throwing or lawn darts.
As a proud manufacturer of stouts, lagers, and ales, you unfortunately must also prepare your business for unexpected events that can damage property, suspend production, injure customers or employees, and cause serious financial distress. Consider the following scenarios:
- A batch is contaminated or spoiled and must be destroyed or removed from the marketplace.
- A customer is involved in an alcohol-related car accident after leaving your tasting room or brewpub.
- Vital equipment or machinery unexpectedly breaks down, leading to property damage, loss of inventory or product, and extended downtime.
- A customer, vendor or delivery person slips, trips, or falls on your property.
- Guests on your property damage equipment or other business property.
- Unfinished or completed beer leaks or spills from a storage tank.
- Weather events, fire, theft, or vandalism damages or destroys your building(s) and its contents.
- Beer in storage or in transit is damaged or destroyed.
Brewery Insurance Policies to Consider
As you can see, risks for a brewery can come from all different directions. And because each brewery’s needs differ from another, you may need to combine a few different insurance policies and endorsements to properly cover your business. With the help of an independent insurance agent, you can determine which types of coverage you need and which ones you don’t, including:
- Business property coverage: protects your building(s) and contents from fire damage, weather events, theft, vandalism, and other covered causes. You’ll need proper coverage for brewing equipment and machinery, inventory, beer stock, furniture, fixtures, computers, and any other business property on your premises.
- Your business property policy should also include coverage for business interruption, which pays for ongoing expenses, lost income, and relocation costs if you can’t operate or you need to relocate after a covered loss.
You may need a variety of additional brewers insurance policies or microbrewery insurance. Talk to an independent insurance agent about endorsements specifically designed for breweries, like:
- Tank collapse coverage pays for expenses related to processing water after a tank collapse.
- Tank leakage coverage provides protection for leakage of completed or in-process beer from a tank or other container (covers the lost beer stock). Damage to the container or other damaged property is covered under the main property policy.
- Restaurant property coverage provides protection for restaurant equipment if you are a brewpub that operates a restaurant along with your brewery.
You also likely need coverage for beer that is in storage or in transit, because your business property policy doesn’t cover beer once it leaves your premises. Your insurance agent can help you find specialty beer storage policies if you store your finished product off-site at a third-party location. Inland marine insurance protects you against physical loss or damage to beer that is in transit.
- General liability insurance provides broad coverage for third-party bodily injury and property damage claims. If a guest slips and falls during a brewery tour or your beer causes someone to become ill, your general liability policy pays for direct costs (medical expenses, etc.) as well as attorney fees, court costs, and any court-ordered settlements or judgments. A general liability policy also provides coverage for claims related to product liability, advertising liability, slander, and libel.
- Equipment breakdown coverage, or boiler and machinery coverage, is essential for a brewery. Brewing machinery is very expensive, and if it breaks, it can take months to repair or replace. Could you continue to operate while you waited for replacement machinery? Equipment breakdown coverage pays for costs associated with sudden and accidental breakdown of machinery and equipment. It covers the costs to repair or replace the equipment and any other property that is damaged by the broken equipment, and it reimburses you for related business interruption costs.
- Contamination and spoilage coverage pays for certain losses if your inventory is spoiled or contaminated due to refrigeration problems or utility interruptions.
- Liquor liability coverage is required for any establishment that sells, services, or furnishes alcoholic beverages. It pays for property damage and bodily injury that results from negligent selling or serving alcohol.
Where Else Do You Have Exposures?
While we’ve addressed many of the exposures in your brewery business, there may be more. Talk to your independent insurance agent about your need for these additional policies or endorsements.
- Commercial auto insurance protects your fleet of trucks and any other vehicles owned by your brewery. Also, if employees drive personal vehicles for business, you need hired and non-owned auto liability insurance.
- Crime coverage protects your business if an employee or a group of employees engages in theft, forgery, or fraud that damages your business.
- Workers compensation insurance is required for any business that has employees. It protects your brewery workers from the cost of work-related injuries and illnesses.
- Cyber liability insurance protects your brewery if you are the victim of a cyber breach. If your computer network or website is hacked and confidential customer or vendor information is exposed, the damage to your reputation and bottom line can be a big one.
- Product recall coverage helps pay for costs related to removing recalled, damaged, or dangerous products from the marketplace.
- Employment practices liability coverage protects you if a current or former employee sues you for discriminatory employment practices.
Where to Find Brewery Insurance
Whether you are a large brewery or a small brewpub, you need brewery insurance that’s tailored precisely for you. By working with an independent insurance agent, you can get quotes from some of the best insurance companies that specialize in breweries. You don’t have to spend time chasing down quotes on your own — your agent is a trusted adviser who can help you find the right mix of coverage for your needs and budget.Contact AIA Today to Learn More