10 Things Distilleries and Microbreweries Need to Know About Their Commercial Insurance

Distilleries and microbreweries, given the unique nature of their operations and products, have specific considerations when it comes to commercial insurance. Here are 10 important considerations for distilleries and microbreweries regarding their commercial insurance:

  1. Product/Liquor Liability Coverage: Distilleries and microbreweries must have robust product liability insurance to protect against claims arising from the consumption of their alcoholic beverages. This coverage is critical in the event of alleged injuries or damages caused by the beer and alcohol.
  2. Property and Equipment Insurance: Ensure that your insurance policy covers the value of your property, including brewing or distillation equipment. This coverage should extend to potential risks such as fire, equipment breakdown, and other perils that could result in financial losses.
  3. Contamination/Spoilage Coverage & Product Recall Coverage: Contamination and spoilage coverage is essential to protect against financial losses due to issues like contamination of raw materials or spoilage of finished products. This is crucial for maintaining product quality and consumer confidence.
  4. Business Interruption Insurance: Business interruption insurance is vital for distilleries and microbreweries, helping cover lost income and ongoing expenses in the event of a covered incident that disrupts operations, such as a fire, natural disaster or distilling accidents.
  5. Customs and Excise Bonds: Distilleries and microbreweries dealing with alcoholic beverages may need customs and excise bonds to comply with regulatory requirements and pay excise taxes. Ensuring compliance with these obligations is crucial to avoid legal and financial penalties.
  6. Liquor Liability Insurance: Specifically designed for businesses involved in the sale and distribution of alcoholic beverages, liquor liability insurance protects against claims related to the consumption of these products. This coverage is vital in mitigating legal and financial risks associated with alcohol-related incidents.
  7. Cyber Insurance: As technology plays an increasing role in business operations, including sales and distribution, distilleries and microbreweries should consider cyber insurance to protect against data breaches, hacking, and other cyber threats that could compromise sensitive information.
  8. Transportation Insurance: If your business involves the transportation of goods, make sure your insurance policy includes coverage for potential risks during transit. This can include protection against theft, accidents, or damage to the products in transit.
  9. Workers’ Compensation Insurance: Distilleries and microbreweries should have workers’ compensation insurance to cover medical expenses and lost wages in the event of work-related injuries or illnesses. Compliance with labor regulations is crucial, and this coverage helps protect both employees and the business.
  10. Legal Compliance and Risk Management: Stay informed about local, provincial, and federal regulations governing the production and distribution of alcoholic beverages. Implement strong risk management practices to minimize potential liabilities and ensure that your insurance coverage aligns with regulatory requirements.

Working closely with an insurance professional who is experienced in the beverage industry can help distilleries and microbreweries tailor their coverage to their specific needs and navigate the complex landscape of risks associated with their unique operations. Regularly review and update insurance policies to adapt to changes in the business environment and mitigate emerging risks.

With a number of local distilleries and microbreweries as clients, we are experts in this area and can help make sure you get the right coverage at the best price. If you have any questions, call the insurance experts at Munn Insurance at 1-855-726-8627. We’d be happy to help.

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