The Number of Craft Distilleries has surged in the US in the past few years. Have you heard all the news about them popping up around the Midlands or legislation changes to provide flexibility for multiple locations?
NPR even profiled small distilleries and documented their meteoric rise. Check out this link to NPR.org, which details the incredible increase in craft distilleries.
I find the insurance and bonding that helps drive these distilleries to success very interesting and maybe your inner insurance nerd will too. Insurance is a critical aspect of the success or failure of any startup especially a distillery. However, a distillery needs specialized insurance for things like tank leakage and tank collapse. Also, they have to post Distilled Spirits Bonds to the National Government and possibly the State Government even to operate.
Property coverages that address exposures common to the distilling industry but not typically covered on a standard insurance policy include:
- selling price and market value clauses
- tank collapse
- tank leakage
- contamination and adulteration of your product
- temperature change
There are also Distillery Liability coverages to look for:
- blanket additional insured status for vendors/distributors
- product recall expense
- liquor liability
- special event coverage if you host or attend tours, tastings, festivals and/or weddings.
As you can see from the brief list above, a standard General Liability and Property Policy will not provide enough protection for a Distillery to be successful. It only takes one large event to force a start-up Distillery to close its doors.
So if you are thinking about starting a Craft Distillery or really any Craft Beverage business (i.e. wine, spirits, or beer), make sure you are protecting yourself and your new venture with insurance that was created just for you.
Want more information or even just someone to run an idea by? Feel free to give us a call or send us an email.