How to Craft the Right Insurance Policy for Your Brewery
Posted in: Commercial Insurance
There are about 9,709 active breweries located in the United States. That’s the most ever — and the number has increased sharply in just the last 10 years.
If you’re a brewer, you already know this: The joy of brewing is not just about creating that perfect glass of ale; it’s also about seeing people enjoy it. It’s also about running and growing a business.
So how does a brewery grow? It opens its doors for tastings and tours. It goes on the road, setting up kegs at concerts, festivals, and trade shows; it delivers to stores. It starts serving food, maybe brings in live music. When I’m out talking to my brewery clients, this is often the kind of thing we discuss. How are you growing your business? And how do we protect you from the inherent risk that comes along with your growth strategy?
While similar, breweries are not bars or restaurants. So, traditional insurance for bars and restaurants, when applied to a brewery, can leave gaps. Let’s talk about how you, as a brewer, might bridge them.
Premises and General Liability Coverage. Whether you are opening for tours or serving burgers and fries, your premises insurance needs to account for the fact that, as a craft brewery, you’re probably located in an industrial type building where there’s a greater risk of slips, trips, and falls, hot surfaces, chemicals and machinery causing harm to a patron. Risk reduction for this exposure can include 1) properly marking walking paths and tasting/tour areas, 2) keeping guests several feet away from equipment, 3) providing safety glasses on tours, 4) requiring closed toe footwear and 5) properly training all employees who perform tours.
Equipment Coverage. For most breweries, the brewing equipment is one of the largest expenditures, and also presents significant pinch points in the production process. While most standard policies will cover your system if it is stolen, an accidental breakdown of your equipment could grind operations to a halt. A well-designed brewery coverage can also protect you from expensive equipment repairs and lost business income.
Mobile Operations. It’s common for breweries to transport products in rental vehicles and employee’s personal vehicles — and that’s a common insurance gap, too. Endorsements can be added to your business policy to cover both hired and non-owned transport.
Special Events. For trade shows, beer festivals, and other off-premises events, you should have some type of special events coverage. Some traditional policies exclude operations away from your premises — a gap you won’t want to fall into.
Liquor Liability. You’ll want to be covered against the risk of your patrons becoming intoxicated and becoming a safety concern or liability. For risk reduction, be sure all staff are trained to identify and handle intoxicated patrons (TIPS training); enforce an ID checking procedure; document serving staff training; minimize the in-house sales of high-alcohol content beers; and have a plan to offer alternative ways for patrons to get home (e.g., cabs, Uber).
Product Liability. Branching out into food? There’s a lot to think about there, including making sure you’re covered against the risk a patron being caused harm from something they consume at your establishment. Risk reduction techniques in this area include verifying the quality of raw ingredients, ensuring their proper storage and temperature control, as well as proper training of all brewing and kitchen staff in safe food handling practices.
Food Trucks. Food trucks serving patrons on your premises increases your risks and liability. You do not want to be responsible for any damages or injuries to third parties rising out of the food trucks’ operations. Make sure the vendors provides you with certificates of insurance showing they have a general liability policy including premises, operations, products, completed operations and auto liability coverage. If they are regularly operating on your premises, or any time your brewery provides utilities to them (power, water, waste disposal), you should request to be added to their general liability policy as additional insured. Your general liability insurance will only cover third party damages if those were your brewery’s fault – a patron trips in a pot hole on your parking lot.
With the right plan, insuring your brewery doesn’t have to be a tall order — but it takes a broker who understands craft brewing and a carrier with programs designed specifically for the industry. This also applies for restaurants looking to add brewing to their offerings. For more information, please feel free to contact me at pdenobrega@psafinancial.com.
