The Special Insurance Needs of Microbreweries
Microbreweries are very popular in the Southeastern US because they give beer lovers the chance to experience great tasting brew with a local flavor. In fact, some of these local breweries also offer restaurant services to better serve their customers. However, a business like this has more risk factors than a microbrewery or food service, and it’s important to make sure you have all these risks covered with the right kind of insurance. If not, you could have problems like Ernie and Sam, in our example story.
Sam and Ernie were passionate about beer, and when Ernie experienced an unexpected financial windfall, he asked Sam to go into business with him. The two men had a lot of knowledge on beer and the brewery business. Sam’s father worked at a brewery for more than 20 years, and Ernie studied beer making for a long time. However, they didn’t know a lot about insuring their business, so they talked to a good friend, Henry, who was a local auto insurance agent. Henry knew everything about car insurance but not much about commercial insurance. Yet, he wanted their business, so he wrote them out a policy. This proved to be a serious mistake.
The brewery/restaurant did well, and over a five-year period, it grew substantially. However, one day, one of their patrons claimed he got sick after visiting their establishment. In fact, over a seven week period, 15 customers claimed they got very ill after eating at their restaurant.
A local board of health investigation showed that a worker sometimes used the same cutting tools for meat preparation and making salads, and they weren’t being properly sterilized. This caused bacteria like salmonella to get in the salad bar, and their eating establishment and the brewery was shut down for several weeks until they could prove they had solved the problem.
In the meantime, 14 people sued the business for medical expenses, lost time from work, and other issues. However, the worst news was yet to come. Their insurance agent, Henry, didn’t bother to tell them about business interruption insurance. They had to shut down for a long time, and meanwhile, the bills kept coming in. Once they restarted the business, many customers didn’t return, because their business reputation had been seriously damaged.
Ernie and Sam lost so much money and so many customers, they eventually had to close their doors and take out a Chapter 11 bankruptcy. If they had business interruption insurance, they could have stayed in business for longer and it might have been possible to regain their reputation and recoup their losses.
Microbreweries Have Special Insurance Needs
If you run a small brewery, you need to make sure you cover all your risk factors. Microbrewery insurance is designed to meet the needs of today’s craft brewery businesses. When you have an experienced insurance agent working for you, you receive all the coverage you need.
When starting up a craft brewery, you should consider these things:
- Commercial property insurance
- General liability
- Product liability
- Product recall coverage
- Worker compensation
- Boiler and equipment breakdown insurance
- Beverage spoilage insurance
- Liquor liability – important if you serve liquor on your premises
Optional Craft Brewery Insurance
Here are some options your business may need to consider:
- Commercial auto insurance – if you have your own trucks
- Inland marine coverage – protects your products while they are in transit.
- Cyber insurance – helps reimburse losses from data theft and can cover emergency management services.
- Business interruption insurance – if you must shut down the business for an extended time, this coverage reimburses you for your losses.
- Flood insurance – standard commercial property insurance doesn’t cover flood damage.
- Earthquake insurance
- Umbrella insurance – extends your general liability coverage and can include things that general liability doesn’t offer.
- Restaurant insurance – if you serve food
- Pub insurance
The Benefits of an Experienced Independent Insurance Agency
Grimes Insurance Agency gives you many advantages you can’t receive with an agency, specializing in one insurance company. When you choose an independent agency, you have people working for you and not an insurer. In fact, our people work hard to earn your business, and we want to keep it.
We do business with the top rated companies, to make sure you get quality coverage that’s affordable. Your agent checks with more than one insurer to find the best rates and the best coverage for your microbrewery.
Our business is not about quick sales and making a “fast buck.” We are in it for the long haul, and we want to earn and keep your business. That’s why we offer honest and personal service that is unmatched.
If you would like to receive more information about the insurance plans we have to offer, fill out the form on this page. You are also welcome to call 800-941-5359 for an insurance quote.