Ale's Well That Insures Well: Top Benefits of Craft Brewery Insurance Explained

The craft beer industry is booming, and with that growth comes risks. Owning a brewery can come with unique risks, including potential business disruption due to brewery equipment failure, contamination costs and product recalls. Each specialty brewery combines its production process and sales channels to purchase different types of insurance to meet unique needs from production to delivery.
Getting adequate insurance for your brewery can feel like an overwhelming process, but a professional policy can take the stress out of the situation. You need to choose an insurance company that understands the specific needs and risks you face, and then they will provide you with a complete customized package.

Why do breweries need insurance?

Nearly every type of business requires the right protection, and breweries have some potential hazards beyond the threat of inventory and equipment. These hazards can harm the public as they interact with your business. Customers, employees, and other guests may be injured or sickened by the brewery’s grounds, products, and operations.
Here are a few things to consider when looking for the right insurance coverage for your brewery:

A batch of beer is tainted or spoiled and your brewery cannot sell it.
Your business could face prosecution if a customer gets involved in an alcohol-related car accident after leaving your brewery.
The unexpected failure of critical equipment or machinery, resulting in property damage, loss of inventory or product, and extended downtime.
You need to pay for a customer, supplier, or delivery man who slips, trips, or falls in your brewery.
Weather events, fire, theft, or vandalism can damage or destroy your building and interior equipment.

If a brewery doesn’t have proper insurance, just one major accident could put your business in the red. Legal action is expensive, especially if you lack proper insurance coverage. If you fail to get the correct brewery insurance, your business could go bankrupt after a lawsuit or other major disaster, such as a fire. Therefore, it is very important to purchase proper brewery insurance.

What Types Of Insurance Do Breweries Need?

Because every brewery’s needs are different, you may need to combine some insurance policies and endorsements to properly cover your business. You can easily determine what type of insurance you need with the help of an insurance agent. Under normal circumstances, the insurance coverage required by a brewery includes:

Property insurance

Any property you own needs to be insured. The value of your property insurance can be calculated based on the actual cash value of the property or the replacement cost of the property. Property insurance will cover the cost of any physical damage to your property, covering the construction of the brewery itself.
Replacement cost insurance can be expensive, but if your brewery suffers a fire or other major damage, it can be difficult to rebuild with just the actual cash value. To keep your brewery running steadily and long-term, it may be worthwhile to invest in replacement cost insurance.

The general scope of liability

Accidents can happen every day in a brewery, and there is always the chance that someone will trip over a chair or slip on a wet floor. General liability insurance will protect you in the event of this type of accident.
General liability insurance protects your brewery should someone trip and injure themselves in the brewery. General liability insurance not only protects against injury but also protects you should your product cause liability. For example, if your beer makes a customer sick, your general liability insurance will protect you.

Liquor liability insurance

Liquor liability insurance is a must for any business that can serve alcohol. Everyone can do stupid things when they’re drunk, and while we’ll do our best, we can’t stop people from making mistakes.
Liquor liability insurance is a special type of insurance that protects you from what half the liability insurance doesn’t. General liability insurance may not apply if the claim is due to the sale of alcoholic beverages.
The cost of liquor liability insurance can vary due to several factors. If your liquor sales are greater than the sales you get from the rest of the business, your costs will be high. Some states may have different regulations for alcohol liability insurance, and these regulations can also affect the price of insurance. Remember, the insurer can play an important role in the price.
You may be in a situation where you are not sure whether it should be covered by general liability or alcohol liability, and it is recommended to use an insurance plan from the same company.

Assault and battery coverage

We like to think that everyone handles things like adults, but some people may behave unwisely after drinking.
Generally, general liability and liquor liability insurance will include assault and battery coverage. But some exclusions might leave you liable. If your general liability and liquor liability coverage include assault and battery claims, you’ll be okay.

Workers' compensation insurance

Almost all businesses must have workers’ compensation insurance. Workers’ compensation insurance protects the company and employees in the event of an accident. If an employee is injured on the job and needs medical attention, the insurance company will pay the employee compensation. Nor are these injuries necessarily actual occurrences. If an employee is out of the office at the time of the injury but is still working for the company, they are still covered.
Workers’ Compensation Insurance protects your brewery while protecting the lives and lives of your employees. If you do not have workers’ compensation insurance, you may face potential lawsuits from injured employees.

Additional protection

The coverage you need for additional coverage will depend on your brewery’s business needs. If your brewery has vans and travels a lot, then you’ll need auto insurance for all vehicles your brewery owns. If you brew your beer, other types of insurance will protect you from accidents such as product escaping or an explosion in a tank that can affect your brewery.
Brewery extras to consider:

Tank Collapse Insurance: Covers all costs related to water treatment after a tank collapse.
Tank Spill Covers: Protects finished or in-process beer spills in fermentation tanks or other containers.
Restaurant property insurance: If you open a brewery and also operate a restaurant, then you need to protect the equipment in the restaurant.
Inland Marine Coverage: Protects your beer or other products during transport, and of course brewing equipment.
Equipment Failure Coverage: Pays for sudden and unexpected failures of brewery equipment.
Contamination and spoilage coverage: If your product inventory spoils or becomes contaminated due to refrigeration issues or utility outages, insurance companies pay a portion of the loss.

If you’re not sure what additional insurance your brewery might need, wonder if your independent insurance agent can help you with any confusion and give you all the protection you need for a custom brewery.

How Much Does Brewery Insurance Cost?

Like any other type of business insurance, the cost of brewery insurance depends on many factors, such as the size of the brewery. If you’re running a large brewery, chances are you’ll pay more on your policy than a small brewery.
Also, the total cost of an insurance policy depends on your business needs. If you’re just getting the bare minimum, then you can expect to pay $625 per month for insurance. This number increases if you also need additional coverage. Often, you may save some of the cost if you pay for your insurance on an annual basis.

Property Insurance Costs for Breweries

Typically, brewery owners pay about $270 a month for their insurance. Insurance companies sometimes bundle general liability and property insurance together, and you might even get some discounts when you buy them together.

General liability insurance costs for breweries

The average cost of general liability insurance for a brewery is about $135 per month. As mentioned above, it may be bundled with other insurance and get discounts.

Alcohol Liability Insurance for Breweries

Liquor liability insurance will cost you about $170 per month. Liquor liability insurance is a must for you to open a brewery to protect you from any alcohol-related claims.

Insurance costs for brewery workers

Your brewery worker’s insurance will cost you about $185 a month, depending on your area. Typically, when a worker is injured, compensation is non-negotiable. If you have employees, it is recommended that you have workers’ compensation insurance to protect your brewery from bankruptcy and compensate your employees in the event of a workplace injury.

In the fast-growing craft beer industry, craft breweries must work harder than ever to differentiate themselves from the competition. While brewing the perfect beer is a very complex task, choosing the right insurance for your brewery is also very important. In general, most insurance companies will provide free insurance audits for breweries to help you decide which insurance to choose.

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