Over the last decade or so microbreweries, craft breweries and brewpubs have exploded coast to coast. Today, there are more than 2,300 breweries and brewpubs in the U.S.
There are a number of risks brewery owners and managers face manufacturing and selling beer. The specific insurance needs of each brewery are unique depending on the size and scope of your brewery operations (craft brewery, microbrewery, large brewery, tap room, brewery tours, on-site events, etc).
Just like brewing stouts, lagers and ales takes careful planning and execution, adequate brewery insurance requires purposeful risk management and consultation to properly manage unexpected events that may cause damage to property, injury to customers or employees, or interrupted production. Consider the following circumstances:
• 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:
Brewery Business Property Insurance can pay for damages to your building, equipment and inventory relating to fire damage, weather events, vandalism, theft and other covered causes. This coverage can also include coverage for the interruption of your brewery to cover ongoing expenses and lost income if your operations are paused because of a covered loss. Business Property coverage can be designed to cover inventory, machinery, brewing equipment, furniture, fixtures, computers and any other business property at your locations.
General Liability Insurance for Breweries can cover third party property damage and bodily injury claims. For example, if a guest in your taproom slips and falls your Brewery General Liability Insurance can pay for the medical expenses, attorney fees, court costs and any judgements or settlements. This coverage can also cover claims for product liability or advertising liability.
Commercial Auto Coverage can protect the vehicles owned by your brewery and the liability claims arising from your brewery’s auto use. If one of your employees is driving a delivery van around town and is in accident sending the other driver to the ICU your brewery is on the hook for that claim. You also can be held liable for claims related to employees driving their personal vehicles for business purposes. In this case you’d need hired and non-owned auto liability insurance to cover the claim. Commercial auto claims can be very expensive, it’s important to ensure you have the property Brewery Commercial Auto Coverage.
If you have brewery employees you are required to carry Workers Compensation insurance. This coverage covers the cost of work-related injuries and illness as well as settlements arising from employee injury claims. The cost of this coverage per employee varies significantly based on the duties, or class code, and payroll of each brewery employee.
This coverage, also known as boiler and machinery coverage, is essential for a brewery because your machinery and equipment are very expensive. If something breaks it can take weeks or months to fix it. Would you be able to continue operations if a significant portion of your production was stalled while waiting for replacement machinery? This coverage can pay for the costs to fix sudden and accidental breakdown and reimburse you for any related business interruption costs.
This coverage is required for any establishment that sells, services, or furnishes alcoholic beverages. It can pay for property damage and bodily injury that results from negligent selling or serving alcohol. This is legally required if you serve alcohol on your premises.
Employment Practices Liability
EPLI protects you if a current or former employee sues you for discriminatory employment practices such as failure to hire, failure to promote, sexual harassment or other discriminatory practices. In recent years there has been a significant increase in claims related to employment practices. Even if the claim is false your brewery is responsible for covering the legal defense costs relating to the claim. These costs are often in the tens to hundreds of thousands of dollars.
While we’ve addressed many of the exposures in the brewery industry, there may be more risk your brewery faces. Talk to one of our brewery insurance specialists today to learn more.