The business of owning wineries can be a very successful business. However, turning this craft into a company does come with its challenges and significant risk exposure. Wineries face unique risks that require specific insurance policies to protect them.
People who own wineries should consider these commonly encountered loss exposures.
Damage or Destruction of Inventory
This damage or destruction can be done through many perils, such as an earthquake or a fire. Earthquakes are capable of causing tremendous damage for wineries, costing millions in damage repairs. Not only can infrastructure go down, but the irrigation systems will also likely be jeopardized, as well as the gallon of wine. The damage may be even worse if the earthquake takes place during a particular time in the season, such as after harvest, when the tanks and barrels would have just been full. This is also more hazarsous during business hours when visitors and staff are present. Earthquakes and fires are just a couple of catastrophic events that are a severe risk to wineries. Don’t risk losing your assets.
There is proper coverage available that can protect your business. However, you must examine the details of the policy to make sure it is right for you. Be sure to define wine stock in the policy’s language and ensure you are covered for wine leakage. Also, be sure to note if you are seeking to cover raw materials and/or finished goods.
It is also crucial to consider inventory loss while in transit, as this is likely something your business must do to keep the door open. It is in your best interest to have a valuation method for lost wine stock and collaborate with your insurer on this. Wine leaks can quickly occur for many reasons, such as poorly maintained equipment leading to a break or an employee damaging a barrel. No matter how small the amount lost, that equals a loss in profits. Review your coverage thoroughly to ensure your claims will be fully paid.
Wine Stock Contamination
How is your business protected from contamination? These incidents pose serious risks to your business. The policy should be written for you to be protected from both human error and cleaning agents. Keep in mind that wines can be contaminated in many ways, such as pesticides, arsenic, or fungus. Regardless of how it is icontaminated it will significantly decrease the value of your stock.
Are you protected from other accidental damage, vessel failure, or human error? Unexpected disasters can put the business through very turbulent times and interrupt operations. This may be difficult to recover from if you are not prepared. No matter what types of disaster strikes, getting back up and running can take a long time. Whether the building is not safe to operate in, equipment needs to be repaired, or wine leaks and delayed harvests, these occurrences will lead to a large drop in revenue. Is your business prepared to make it through these types of challenges? Protect your business by making sure you are equipped with a business interruption plan.
It is important that you thoroughly discuss what you need covered with your agent if your inventory is damaged, so you are both on the same page about your specific business needs. Do you operate with stock outside of your care, custody, and control? You will want to make sure your NJ Winery Insurance covers this as well as any inventory that is not stored on your property.
Note that tasting rooms face the same liability issues as bars. There are stringent laws on serving minors or intoxicated individuals. If an accident was to occur associated with improper serving, the legal action could be financially devastating to your business. If you host any off-site event, you will need to be covered for that as well. Ensure your winery has full liability coverage with adequate commercial general liability policy limits, liquor liability coverage, and possibly umbrella coverage.
About David G. Sayles Insurance Services
At David G. Sayles Insurance Services, we help our clients decide which of these options is best for them based on their current situation and risk factors. Contact us at 1-855-977-1842 or firstname.lastname@example.org for a consultation!