The answer is unequivocally, yes. While a Personal Liability policy alone may suffice for homebrewers, if you are running a brewery business, you should consider at least getting a Commercial General Liability Policy (known as a CGL).
Additionally, insurance requirements are governed by state law and you may be expected to obtain coverage for Worker’s Compensation or employee disability, so be sure to check your state’s laws.
Keep in mind these may be required even if you only have one employee. Employees are classified by their job duties and breweries tend to have brewers, office employees, sales representatives and potentially servers if you are operating a brew pub.
When you buy a policy to insure your brewery, you become the policyholder, or the insured.
While the language may vary, generally CGL coverage means that if there is an instance of bodily injury or property damage during your policy period, your insurance will cover it.
Keep in mind that “covering it” means that if there is a claim or any suit filed seeking damages, your insurer has a duty to defend and indemnify you as the policyholder.
While a CGL can be comprehensive, don’t make the assumption that the policy has coverage for every possible scenario your business may face. Oftentimes, companies will combine a CGL with further coverage in order to get what is known as a Business Package Policy. In order to put together the best package to insure your brewery, it means taking a good look at your business to determine all the facets you’re currently engaged in. For example, if you're a brewery that also hosts tours and tastings you may want to be sure to include any extra coverage for third parties.
Particularly important for a brewery is keeping in mind that your property, i.e. your equipment and supplies, are an integral part of operations. You may choose coverage based on the actual cost of your equipment, or by the replacement cost. Determine whether each insured piece is worth recouping the cost, or getting the item replaced. Be sure that all of your property, from bottle caps to fermenters are covered.
On top of general and property liability, also consider the specialized issues that face a brewery. For example, while you may have equipment breakdown coverage for a leak in your brewing system, do you also have coverage for the amount of income lost during the delay in production while repair/replacement took place? Similarly, while your insurance may cover your glycol chiller compressor repair, you may also want coverage for the potential spoliation of your stored beer while your cooling system was down.
Generally, breweries have to consider issues such as products liability, false/misleading advertising liability and property in transit liability (delivering your product off site) when insuring their breweries.
Don’t worry! Remember, the ideal amount of coverage you need is highly dependent on what your expected amount of risk is. It is a good idea to ask for recommendations from fellow brewers (or check out message boards or comment below), or do your research on an insurer who is familiar with the brewing industry and can assist you with common issues. The goal is not to be over or under insured by getting a goldilocks policy.
Lastly, once you receive your policy, make sure you read and understand it! Ultimately, you should have a very clear understanding of who, what and when things are covered. Policies, particularly CGL’s, have exclusions and limitations on coverage and you should be aware of what those are. Insurance contracts are full of technical jargon, so don’t be afraid to go over every provision of your policy with your insurer. If you can, get all of your coverage questions in writing to avoid any issues.
Luckily, when it comes to purchasing supplies and equipment, Kinnek has you covered. You can browse top-rated products from multiple suppliers all in one place!