As a brewery owner, you probably prefer to spend your time perfecting your signature brew, rather than researching insurance coverage. But the right insurance is critical for even the smallest nano-brewery, especially as you look to expand your distribution or grow into a larger operation.
Most breweries in Canada are small, local operations, producing less than 15,000 hectoliters of beer, according to the latest stats from Beer Canada. Like other small businesses, brewery owners and operators need standard coverages for risks such as slip-and-falls, theft and vandalism, and natural catastrophes.
But you will also need specialized coverage to protect your brewery from risks specific to the industry — everything from equipment breakdown to spoiled batches of beer. Plus, if you operate a taproom and serve alcohol to patrons, you take on another level of risk that should be properly insured.
Without the right insurance, you could be on the hook for costly lawsuits and other expenses that could interrupt or even shut down your business.
What risks do brewery owners face?
As a brewery owner or operator, you rely on specialized equipment and machinery, like grain hoppers, grain mills, and boilers. So, if that equipment breaks down, your business could be on hold while you source the right components or find technicians to repair or replace your equipment.
While all businesses are at risk of natural catastrophes such as flood and fire, your brewery uses equipment and processes that could cause injury or property damage. For example, customers on a tasting tour could slip and fall on a wet floor.
Breweries also house hazardous chemicals and flammable materials, from cleaning solvents to compressed gas cylinders. When you combine those materials with a gas boiler in an enclosed space, that could lead to a fire or explosion.
When it comes to your beer, any issues with brewing, bottling, or storage could result in inconsistent quality, contaminated batches, or mislabeled products. For example, a fire in a neighbouring business might prevent you from accessing your brewery at a critical part of the production process, causing the batch to spoil.
If you’re a smaller brewery, you might rely on third parties to store your beer offsite or deliver product to customers — so you might not have complete oversight into quality control (such as inconsistent temperature in a cold delivery truck). Yet, if your product is compromised and hits store shelves — even if it’s not your fault — you’ll be responsible for issuing a product recall and notifying the public, which can be expensive and damaging to your brand.
On top of that, you might face supply chain disruptions, which could impact production costs or leave you without an essential ingredient for your signature brew — and scrambling to find last-minute alternative suppliers.
And, if you offer beer tastings or operate a taproom, you could be held liable if someone is over-served and injures themselves or other customers. You could also be held liable if a customer or employee falls on a wet or slippery floor in your brewery, causing injury.
What type of insurance do brewery owners need?
All business owners should consider Commercial General Liability (CGL) insurance as a foundation for brewery insurance, which can safeguard your business if you’re found legally liable for bodily injury or property damage to a third party on your property. But there are several other coverages that can be customized to your needs, including:
Commercial Property: Helps you recover if your building, equipment, furnishings, inventory, and/or supplies are damaged or destroyed in a natural catastrophe or because of theft or vandalism.
Business Interruption: Helps with loss of net income if you’re forced to shut down operations due to an insured cause.
Equipment Breakdown: Helps protect you from costly repairs and production delays if there’s a sudden, accidental breakdown of essential equipment or machinery.
Cyber: Helps with expenses related to data recovery and customer breach communications if your business is the victim of a data breach or cyberattack.
Liquor Liability: Helps cover damages caused by customers who consumed alcohol on your premises or allege they were over-served.
Keep your business safe with brewery insurance
Unfortunately, you can’t always control what happens to your business. You can, however, control how prepared you are. Having the right protection in place can make a huge difference. To learn more, visit our brewery insurance page today.
This blog is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information. Terms, conditions and exclusions apply to coverage. See policy for details.
