Brewery Insurance Made Simple: Everything You Need to Know
Brewing beer may be your passion, but it’s also your business. And like any business, it involves many challenges that impact your operations, reputation, and finances. For example, what if your equipment breaks down, ruining your latest batch? Or what if patrons become ill after drinking your products?
Whether you’re a craft brewery, microbrewery, or distillery, you need a customized insurance program to safeguard your company against unexpected losses, legal claims, and regulatory fines.
But…where do you start? What type of coverage does your brewery need?
In this article, we’ll cover the most important coverage you’ll need to consider when creating your first brewery insurance program, starting first with what’s required by federal law.
Required Coverage
Although every brewery insurance policy is customizable, two particular coverage types are required by federal law: workers’ compensation and liquor liability.
Workers’ Compensation
The federal government requires that all businesses with employees carry workers’ compensation coverage. No matter how careful you are, brewing beer poses potential risks. Workers’ compensation insurance covers work-related injuries. So, if an employee slips and falls in the brewhouse or cuts or burns themselves while serving your best beer, they can get the care they need.
Liquor Liability
If you sell alcohol, you are required to carry liquor liability insurance. With this coverage, you won’t have to worry about incurring financial loss in situations where a customer’s intoxication led to personal injuries or property damage.
Standard Coverage
Every brewery insurance program is unique, but all policies will have general liability and property damage coverage.
General Liability
This coverage protects you against injuries that occur around or inside your brewery, self-inflicted damage to your building, and libel/slander. For example, a general liability policy may reimburse you for the related expenses if someone gets sick from your beer or falls on a slippery floor.
Some general liability policies may also cover product liability, which protects your brewery from damages or injuries caused by your products. When you’re creating your insurance policy, be sure you verify that product liability is part of your general liability coverage. If it’s not, you may want to consider adding it to your plan.
Additionally, if you don’t own your business property, your landlord or property manager may have specific requirements for general liability insurance, so be sure you understand those requirements before building your plan.
Property Damage
Property damage insurance covers the costs of repairing or replacing your property if it’s damaged by a covered peril, including fire, theft, vandalism, and certain natural disasters. Covered property may include your building, inventory, furniture, and fixtures essential to your brewery operation.
Please note that floods and earthquakes aren’t typically covered perils. If you live in an area prone to earthquakes or flooding, you’ll need to add separate coverage to your plan. Additionally, your landlord or property management company may have specific requirements for property damage coverage, so be sure to consult them before creating your insurance program.
Additional Coverage
There are several coverage options you may want to add to your program, depending on your specific needs, including tank, equipment failure, contamination/spoilage, and commercial auto. Keep in mind that coverage options will vary by insurance company.
Tank
Tank insurance covers water treatment costs after a tank collapse and protects you against spills in fermentation tanks and other containers. This coverage will help you pay for product loss and related expenses.
Equipment Failure
When your equipment breaks, it causes unplanned downtime and financial loss. If you have equipment failure coverage included in your insurance program, you can receive compensation to repair or replace faulty equipment and recover lost income.
Contamination & Spoilage
As a brewery owner, you already know how devastating dealing with contaminated or spoiled beer can be. With contamination and spoilage coverage, you can receive reimbursement for products contaminated or spoiled due to electrical issues/power loss and other covered events.
Commercial Auto Insurance
If you use trucks to deliver your beer to retailers, distributors, bars, pubs, and other establishments, you’ll need commercial auto insurance, which covers property damage and collision-related expenses (repairs, medical expenses, etc.).
Determining the Cost of Brewery Insurance
Several factors determine the cost of a brewery insurance program:
- Size: Larger breweries typically have more equipment, inventory, and employees. This increases your risks and the number of potential claims.
- Number of Employees: You pay workers’ compensation insurance for each employee to cover potential medical expenses and lost wages related to on-the-job injuries. So, the number of employees directly impacts your insurance costs.
- Location: If your brewery is located in an area with strict regulations or a high crime rate, this will affect the cost of your policy. You may also pay more if you operate in an area prone to wind storms or flooding.
- Coverage Amount: You may choose to purchase general liability insurance, which covers third-party property damage and personal injury claims. The amount of coverage needed affects your monthly costs.
Create Your Brewery Insurance Program Today
Creating your first insurance program can be overwhelming. Let our team at Allied Insurance Managers help you get the coverage you need. Contact us today to schedule a consultation with one of our knowledgeable agents.
