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Distillery Insurance

Unique insurance for your unique spirits.

 

Distillery insurance for your business needs.

Running your own distillery can be fun and exciting, but it’s not without its own unique risks. You’ll need general business insurance, but specialized distillery insurance coverages like liquor liability insurance and equipment insurance should not be overlooked.

Specialized distillery insurance tailored to you.

Your distillery could take on the attributes of many other businesses, creating a need for an insurance program designed for you. The risks you face depend on whether or not you give tours of your facility, serve alcohol, or host events. If you handle your own distribution, that’s another concern. Limits and policy specifications must be appropriate for your business or you could be left with exposed risks.

Your product and your equipment carry high values.

Your cooker, fermenter, and still were expensive. Replacing one of these alone could be financially devastating. Even if a piece of machinery breaks, repair costs can add up fast. Having the appropriate amount of property insurance, as well as mechanical breakdown coverage, could help. Similarly, if a batch of a distilled spirit is ruined, the revenue lost will be substantial. Obtaining coverage for spoilage, contamination, and product recall can provide financial coverage.

Liquor liability coverage is a must if you serve alcohol.

If you serve alcohol, you need liquor liability coverage. A patron who consumes too much liquor at your establishment could leave your premises and cause property damage or bodily injury. Because you served them, you can be sued and held liable for the damage caused by the intoxicated patron. Liquor liability insurance covers defense costs and damages awarded.

 

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Business auto insurance provides important coverage.

Any business that uses a vehicle for company purposes needs business auto insurance. Personal auto policies do not cover business use, so even the smallest distillery who has an employee running errands or making a delivery has a business exposure that could require hired and non-owned auto insurance. If you own vehicles in the company name to distribute your product, for example, you have an even bigger exposure.

Manage the business side of your distillery.

Although specialized distillery insurance is important, you cannot forget about general business insurance needs. Things like workers’ compensation, cyber liability, general liability, and premises liability insurance should be obtained. Employment practice liability and crime insurance are other policies that need to be considered for distilleries in particular.

Ready to discuss your unique distillery insurance needs? Contact us today.

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As an independent agency, we are here to help you find the right coverage.

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Business Auto Insurance

Risk Factor

An auto accident can cause bodily injury or property damage to others for which you are responsible, potentially putting your business in financial jeopardy.

Solution

Business auto insurance provides coverage for vehicles owned or leased by a commercial enterprise and provides coverage for bodily injury, property damage, and other coverages, and includes both comprehensive and collision coverage.

Premises Liability

Risk Factor

What happens when your business faces a large liability loss that exceeds the basic limit of your standard policy?

Solution

Be sure your policy has liability coverage that includes tenants legal liability or premises liability. Your landlord may require that you to have this type of insurance protection in place as a requirement before renting the property to you.

Stills and Property

Risk Factor

Fire, theft, and other disasters can cost your distillery thousands upon thousands of dollars in damages, especially if it impacts your stills and other expensive equipment. With risks like explosion from secondary fermentation, water damage from wastewater, and more, it is important to have the right coverage in place.

Solution

Commercial property insurance can help protect the property your business owns or leases, including things like equipment, inventory, furniture, and fixtures. Whether you own your building or lease the space, commercial property insurance can be purchased separately or can be combined with other necessary coverage to protect your business’ physical assets. However, there are limits on what commercial property insurance typically covers, so be sure you get any additional policies you may need to cover things like equipment breakdown and inventory.

Liquor Liability

Risk Factor
Any establishment that sells, serves, or assists in the purchase or use of liquor is open to a liability claim as a consequence of someone getting inebriated to the extent that injuries or property damage result.
Solution
If you are in the business of selling or serving alcohol, it is critical that you protect yourself from potential financial losses by obtaining a liquor liability insurance policy. Having the right policy in place could help cover your legal costs, court fees, and any civil or criminal damages stemming from an incident involving liquor.

Equipment Breakdown

Risk Factor

While your homeowners policy covers a wide array of perils, such as damage caused by a fire or a falling tree, it doesn’t cover some common types of problems that can occur to the equipment in or around your home. For example, a sudden surge from the local power plant might damage appliances, HVAC systems, or your home power generator.

Solution

Add mechanical breakdown coverage to your homeowners policy. If you have multiple homes, it can be purchased for each one individually. Keep in mind that while it does protect against major events, it does not cover normal wear and tear.

Environmental Liability

Risk Factor

Environmental liability exposures are not just for oil companies, nuclear power plants, and industrial mining operations. Breweries have wastewater and waste management concerns. Depending on the location of the brewery, previous use of property may also be an issue.

Solution

Strict liability laws apply to the brewing industry. Court-ordered injunctions, fines, and cleanup costs can be crippling. Almost all commercial liability policies contain some type of pollution exclusion. Coverage exists for this exposure through a standalone policy.

Tank Leakage and Tank Collapse

Risk Factor

If one of your tanks leaks or collapses, you could be facing the loss of a lot of product and the costs to reproduce it.

Solution

An extension of your commercial property insurance, tank leakage and tank collapse coverage can help your distillery cover the costs associated with malfunctions of your tanks. They can help reimburse you for the lost raw materials and can also help cover replacements so you can make a new batch of liquor.

Spoilage, Contamination, and Product Recall

Risk Factor

If a batch of beer is contaminated or in some way unfit to serve, breweries have much to lose, including the cost of additional materials, production time, disposal of product, and loss of revenue. If the batch makes it to store shelves, it becomes even more costly, both in direct revenue and brand reputation.

Solution

Seek coverage for spoilage, contamination, and product recall to help offset the costs associated with these events.

Stock and Inventory

Risk Factor

As a distillery, your business is all about producing a finished good, in your case, liquor. That means not only does you have stock and inventory in the form of the raw materials for production, you also have it in the form of your finished goods. If something happened to either your raw materials or your finished liquors, your business could face significant financial losses.

Solution

Stock and inventory are typically covered under a general commercial property policy, but you’ll want to make sure your policy has the right amount of coverage you need. Especially since insuring stock and inventory can be tricky, since values can be hard to pin down due to a variety of factors. You’ll want to make sure your policy offers you the right amount of coverage with flexibility to handle value fluctuations.

Employment Practice Liability Insurance (EPLI)

Risk Factor
On average, it’s estimated that three out of five businesses will be sued by their employees. Restaurants, just like any other business, are vulnerable from the pre-hire process through to a possible reduction in workforce. Claims can stem from just about anything, such as someone taking a “joke” the wrong way and being offended.
Solution
Coverage to protect you against this risk normally comes as a standalone policy. The right coverage is critical to your risk management process as it protects against discrimination, wrongful termination, sexual harassment, and other employment-related allegations. Typically, the policy will cover your business as well as your directors and officers. Third party coverage is an added option, usually accomplished via a policy endorsement, and addresses claims made by customers or vendors against you from acts committed by employees.

Supply Chain

Risk Factor

As the brewing industry grows, supplies may become increasingly difficult or competitive to acquire. Making sure you have the adequate amount of Chinook hops for your spring seasonal can be the difference between having product to sell or not.

Solution

Diversifying suppliers, maintaining dialogue with back-up suppliers, monitoring the resource environment, and negotiating forward contracts can prevent disruption in production. Insurance coverage for contingent business income can be also obtained.