By: Ben Cavallo, owner and principal of C&S Insurance
When breweries are shopping for insurance the most common questions we hear are:
- What does microbrewery insurance cover?
- What comes in the “standard” startup package?
- Which coverages am I required to have in place so I can open a microbrewery, nanobrewery, or brewpub?
Folks starting new breweries—and plenty of long-time owners, too—call to ask for the baseline minimum. After all, running a business comes with all sorts of hidden costs and unforeseen expenses. No one wants to shell out extra money for insurance—which is basically a business tool you can’t see, can’t touch, can’t even use unless something goes wrong.
Unfortunately, we have to give these brewers the same answer: it all depends. Not very helpful in the immediate sense, but individualized needs are the reality of craft brewery insurance. There’s not much standard about it, despite the results you can find online for “business insurance packages.” What’s more, shopping for a cheap, generic option often leaves craft brewers exposed to serious gaps. Here’s a quick look at some examples:
1. Property Insurance
Unlike a typical restaurant or bar, the products and equipment inside your microbrewery are especially costly and time-consuming to replace. In the event of a fire, prolonged power outage, tank leak or other machinery failure, you have to consider the potential loss of business income, product spoilage, and other unique concerns. Only an agent with experience in microbrewery insurance can advise you property coverage blanket limits based on your in-house capacity.
2. General Liability Insurance
Allegations of wrongdoing don’t just damage your brewery’s reputation; they’re often expensive and drawn-out legal events—and that’s before they even get to a courtroom. It’s difficult to anticipate how much liability coverage you’ll need (on a “per occurrence” basis and in aggregate) without enlisting an industry professional. Even if you opt to forego certain coverages as a startup operation, it’s important to at least understand the different types of risk and protection—from liquor liability, to special events, to employment practices liability (employee lawsuits)—as your brewery grows and evolves.
3. Workers’ Compensation Insurance
We know lots of microbrewery startups begin with a pair of spouses, siblings, or hometown buddies, which might seem to negate the workers’ compensation discussion… But the truth is that most small businesses in the Commonwealth of Massachusetts are required by law to have a valid workers' compensation policy at all times—even for a staff of just two people. If your business is an LLC, LLP or otherwise qualifies for exemption, there’s still a conversation to be had. Chances are you don’t intend to be a two-man (or two-women) show forever. Anticipating the measures and protocols that will affect your workers’ comp rates is a smart thing to start doing now. Take advantage of the free advice you can get from a dedicated brewery insurance agent.
Bottom line: when you ask yourself, “what does insurance cover?” you should be prepared to sit down and have a longer conversation with an agent who is an expert in your industry. He or she will listen to your complete business description and ask a series of questions designed to map your unique risk profile. Meanwhile, learn more about the factors that affect microbrewery insurance rates and carrier options: