There are more than seven thousand craft breweries operating in the United States today, and each one of them faces unique risks and challenges due to the complex process of brewing beverages like beer, cider, seltzer, and more. A successful microbrewery will understand those risks and do whatever it can to minimize them.
Both established breweries and new ventures can receive valuable support from Philadelphia Insurance Companies (PHLY). We are dedicated to supporting the industry by helping our insureds develop good risk management techniques. Without proper risk management and insurance coverage, a microbrewery business could easily be saddled with large expenses from equipment failure and lost revenue.
A Microbrewery Insurance Program Can Help Protect Against Common Problems
When considering craft brewery or microbrewery insurance, here are five commonly-filed claims to keep in mind:
1) Brewery Equipment Failure
Due to the nature of brewing, the risk posed by equipment breakdown can be grave. Because of the high pressures that can build up throughout the fermentation process, storage tanks and vats can break down or even explode if not properly maintained.
Many craft breweries, cideries, and distilleries are small businesses that are already operating on shoestring budgets. Small-scale facilities such as these will rarely have backup equipment at the ready in the case of breakdowns. As a result, equipment failure can cause expenses from lost production time and missed sales, in addition to the cost of repair or replacement of faulty equipment.
The Craft Brewery & Distillery insurance package from Philadelphia Insurance Companies (PHLY) is a flexible and customizable product tailored to suit the specific needs of individual brewers. The policy broadens the definition of "building" to include all equipment used in the production of beer, cider, and other craft beverages. Product withdrawal expense coverage is also available in case of unforeseen quality issues.
2) Power Outages and Temperature Changes
Throughout the processes of brewing, bottling, and storing craft beverages, it is absolutely crucial to maintain the proper temperatures. Improper temperatures due to power outages or other incidents during the brewing process could cause perishables to spoil, resulting in losses from ingredient waste. Issues during bottling could cause bad seals, resulting in batches of product unfit for sale.
Fortunately, PHLY's Craft Brewery & Distillery insurance plan offers insurance coverage against these types of situations. Spoilage coverage offers protection against the loss of perishables due to mechanical breakdown or loss of power. PHLY will even evaluate the lost product at market price and reimburse the insured for the full market valuation.
3) Premises Liability
Many microbreweries and distilleries offer tours of their facilities to customers and guests. These offerings are a great way to show curious visitors how their favorite beverages are prepared, brewed, and bottled. However, brewers can become liable should their guests become injured while on a tour or during other special events.
At PHLY, we offer special events liability in addition to comprehensive general liability coverage with a limit of $1M per occurrence. Additionally, PHLY offers complementary risk management services to our customers. We offer advice on the best safety equipment for tour guests, as well as on how to restrict guest access to only the safest parts of the facility, all in an effort to improve safety and minimize accidents.
4) Liquor Liability
A brewer can open themselves up to additional liability by serving liquor on-site. Offering samples after tours of the facilities or having a bar on site all incur potential risks from intoxicated guests. Guests under the influence could damage property and injure themselves or others.
PHLY's Craft Brewery & Distillery insurance package includes liquor liability to protect against these types of situations. Liquor liability extends to a limit of $1M per occurrence and $2M aggregate. Additionally, our industry-specific risk management services include training for staff to encourage best practices and prevent over-serving.
5) Excess Limits
PHLY can add an additional layer of security to a microbrewery insurance program with an umbrella/excess policy. Essentially, umbrella coverage can pick up where your underlying business auto, general liability, and/or liquor liability coverage stops.
Do you have a microbrewery client who could benefit from our microbrewery insurance program? Contact PHLY today to talk to a product representative about brewery insurance costs and plans that suit your clients' needs and budget.