For the Brewery
When you are planning your brewery, most of the excitement comes from planning out plant operations, designing logos and recipes, and looking for that perfect space.
It is only when you start diving into the deep cuts of your business plan that most people realize that they don’t know anything about commercial insurance. Or they make the mistake of reaching out to their personal lines agent.
The commercial property and casualty insurance market is a huge place. Quotes can vary drastically from one market to the next, and the cost of the premium isn’t necessarily a good indication as to the quality of the coverage.
Some important things to consider as you are in the first phase of planning your brewery:
Speak with a Broker
Preferably, the broker has experience in the brewing world. Experience with restaurants will work if you can’t find someone who understands what a zwickel is.
Speak with brewery owners in your area. As soon as you find a broker that works with more than one, call that person. They should be able to give you a very rough estimation as to what your costs will be and answer any other questions you have.
Understand What Lines of Coverage you Need
• General Liability – pays for injuries or property damage caused by you or your employees
• Property – protects your equipment, your stock, your building, and the brewery’s income if a loss shuts down your operations. Probably the most important coverage that needs to be specifically tailored to a brewery.
• Liquor Liability – provides protections if someone is overserved (or simply alleged to have been overserved) at your brewery and a loss occurs.
• Auto – pretty much what you think it is. If you are moving large quantities on your own vehicles, a cargo policy may be in order.
• Workers Compensation – pays for medical expenses from workplace injuries and a portion of pay if the worker is out of work for an extended period. Laws for work comp vary from state to state, and deductibles are very important in keeping this cost down in the long-run.
• Builders Risk – a coverage that you will only need during the buildout phase, but one to be aware of. Your contractor or landlord may place this coverage as well.
Depending on how big your start-up operation is, your needs could be broader than this. But these coverages are universal across all breweries, no matter the size.
The most important thing to keep in mind is to contact a broker well before you need the insurance. The longer that underwriters have to consider your account, the better position you will be in to make a good business decision.
Directors and Officers Liability
Depending on the legal structure of your business, you may be required to have a board of directors. The responsibilities of the board can vary depending on your articles of incorporation, but the most important attribute of the board is that they have a responsibility to protect the money and assets of the organization.
The likelihood that one of the members causes physical harm to someone is very slight. If that happens, general liability policies are in place to cover those occurrences. But what if a board member makes a decision that financially damages a vendor? Or an employee?
The day to day life of a brewery owner is filled with a lot of things that aren’t related to beer: dealing with payroll, fixing pumps, training new employees, tending to social media, or about a thousand other things.
So when someone asks you to sign a contract, whether that’s to bring on a mobile canner or to participate in a beer festival, many will either simply sign the document or hand it off to their attorney.