Craft Brewery Insurance Guide: Coverage Types, Cost
March 03, 2020
The craft beer boom is in full swing, and it seems like a new brewery opens for business every week. The variety of companies is great for the craft beer enthusiast – each brewer has a unique style and take on craft brewing, and drinkers have plenty of opportunities to find their favorites.
Those who have went through the process of starting a new brewery are reaping the benefits, but not without a lot of hard work. Running a brewery involves more than just brewing beer. The actual brewing is only part of the process. Maintaining a business is where things can get a bit tricky.
One thing that many new business owners don’t think about right away is insurance. While they’re focused on getting their product ready, they also need to be thinking about how they can protect their business.
There’s general insurance that will cover your everyday business needs, but then there’s also insurance that’s specific to breweries – in particular, coverage for your brewing equipment. As a mainstay of your business, if your brewery equipment suffers, so do the rest of your operations.
Navigating insurance plans can be tricky. Sometimes it seems like it takes an advanced degree to figure out what the terminology is. Here’s a quick breakdown of everything you need to know when purchasing insurance for your brewery.
Having insurance means that you have protection. Sure, you could go years without ever having to file a claim, but the moment you need it, you’ll be glad you have it.
Choosing the right insurance coverage is a decision that you need to make. What risks are you willing to take on, and do you have enough money to cover them should they happen? If not, you need to be upping your amount of insurance. Without insurance, you’re likely one accident away from having to close business.
As a brewery owner, you’re liable for more than just the beer that you produce. Sure, it would be nice to focus only on the brewing, but there are other risks that you need to consider. Depending on what type of brewery you’re operating will determine the risks for which you need to prepare.
If you’re only brewing beer, you’ll have unique risks but smaller than if you were opening to the public. For the most part, you only need to worry about things that involve the production of your brew. These risks are things like contaminated batches, equipment breakdowns, and tank leaks and spills.
Once the public is involved, you open yourself up to much more liability. If you have a tasting room or a restaurant, you have more possibilities for things to go wrong. If an intoxicated customer has a car accident after leaving your facility, you can be held liable. Even if a guest gets injured on your property, there’s a good chance that it will cost you.
Everyone wants their spot to be a fun place, but as a business owner, you need to balance the risks with the rewards. Thinking of stocking lawn darts or hosting a Jell-O wrestling competition? Just know that you’re opening yourself up to potential liabilities if guests are hurt.
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The cost of brewery insurance will depend on the size of the brewery. Smaller microbreweries won’t pay nearly as much as any macro breweries.
Usually, a good average for the cost of brewery insurance for small breweries is $77 – $109 per month for standard $1,000,000/$2,000,000 general liability insurance. However, this cost will vary based on other factors like your location, size, experience, and sales.
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Business Property Coverage
Your property needs to have coverage in case of any emergencies. Just like your homeowner’s insurance covers your house in case of an emergency, your property insurance will do the same for your business.
If the unforeseen happens – your roof collapses, a car hits your wall, fire, or vandalism – your property insurance will help you get your business up and running before it can make an impact on operations. It’s hard to run a business when you don’t have a building in which to work.
Tank Collapse Coverage
A mainstay of your business, you need to be sure that you have coverage for your tanks. If one of your tanks collapses because of implosion, you’ll have a big problem on your hands.
Tank Leakage Coverage
Maybe your tank doesn’t collapse but leaks instead. Without tank leakage coverage, any lost beer is gone for good. Leakage coverage will also cover any other storage container, so if you run into any other issues, you’ll be covered.
Restaurant Property Coverage
Does your brewery have a restaurant? A restaurant can bring in just as much business to your brewery as the beer does. If your restaurant equipment goes down, it could cost you. Restaurant property coverage will protect you in case there’s an issue with your equipment.
General Liability Coverage
All businesses need to cover general liability insurance. General liability insurance is what will protect you for any of the potential risks of day to day operations.
If your beer or food causes someone to get sick or if a guest falls walking up the stairs, your general liability coverage will help pay for the direct costs and any potential legal fees that you might encounter. General liability can also cover any business issues related to the product, advertising, slander, or libel.
Equipment Breakdown Coverage
Depending on the size of your brewery, if your equipment breaks down, it could have a significant impact on operations. If you’re small enough, it could even mean the end of your business altogether.
Equipment breakdown coverage will help with the cost of repair or replacement of equipment and any property that was damaged by broken equipment. On top of that, your policy will also cover any losses from business interruption.
Contamination and Spoilage Coverage
What happens if your brew is contaminated? Without coverage, you’d have to eat the loss from the product, but you also wouldn’t have any beer to sell. Contamination and spoilage coverage pays for some of the losses if any of your product goes bad.
Liquor Liability Coverage
Liquor liability coverage is non-negotiable. Any business that sells alcoholic beverages is required to carry liquor liability. This coverage will pay for any bodily injury or property damage from over-serving customers.
Workers’ Compensation Insurance
If you have employees, you need workers’ compensation insurance. This coverage will protect your brewery workers from any costs that they receive due to injury on the job.
Brewing beer is a fun business to be in, but it also has the potential for danger. Workers’ compensation will make sure that your employees have the assistance they need.
Next Steps in Opening Your New Craft Brewery
Running a business is tough but rewarding work. Each day can come with a new set of challenges. If the worst were to happen, you don’t want to be stuck paying for costs out of pocket. Knowing what insurance you need will help keep your brewery serving beers for many years.
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2ndKitchen 2Go is an online platform for breweries to manage to-go and delivery orders, sell merch, collect donations, and more. 100% free to use.