What Insurance Do I Need for My Distillery and How Much?
“What insurance do I need for my distillery? How much do I need for my distillery?”
We get these questions at every client meeting with a craft distiller. This industry is reemerging and growing so fast that the answer is not easily avaible. There are many different areas that go into valuing insurance, but we can mostly break this down into 3 areas:
- Stills & Property
- Liability Limit Needed
- Product Recall
Stills & Property
Any craft distiller or spirit maker will be most concerned with his or her stills and equipment. As anyone in the spirit distilling industry knows, these pieces of equipment are very expensive and often have a long lead time for delivery (many coming from overseas!). To value it, one must consider all three of these factors: How much is your time worth to wait on a new one? How much lost revenue will occur during that time? Does your insurance cover the damaged equipment? Not all property policies were created equal! Keep in mind all those pieces of electronic equipment that are so valuable to quality control need to be considered in your valuation as well.
A quick insurance property value estimate would be a tally of invoices of your current stills and other property used in the course of your business. Don’t forget to account for inflation! Also, talk with your agent about business interruption insurance.
Liability Limit Needed
At least a $1,000,000 limit. Do you have a tasting room? If so, you need liquor liability. What else do you do? Make sure to have an open and honest dialogue with your agent to properly insure yourself.
This will keep you up at night! You are shipping your bottles to stores around your area or even countrywide, what happens if you find out the batch was contaminated or the bottle causes someone harm?!?! What are you going to do? Make sure you have this coverage. Recall expenses can add up quickly, so get a good agent with specialized experience.
Need more help? Try the Distilled Spirits or Craft Spirits Associations.
The Distilled Spirits Council of the United States may be able to help you with valuations because they are some of the industry experts. They are the trade association for nearly 70% of all distilled spirits sold in America. They have special member rates for small Craft Distillers. Check them out here.
The American Craft Spirits Association is a trade association specifically representing the US craft spirits industry. They have a number of benefits including some vendor discounts! Check out this Association here.
The Craft Distillery and Spirits Distillery industry is full of new growth and potential.
It is also highly specialized, confusing, and complicated. You need an insurance risk manager and agent to help protect you and your assets. We are located right in the heart of the Midlands of South Carolina in West Columbia, but we can help you with advice or service wherever you are in the United States.
Choose wisely! Contact us with any questions!