Production breweries and brewpubs are different businesses with different risks and they need different insurances, according to a leading insurer.
Justin Williams from Corpsure said that a lot of breweries and brewpubs are incorrectly insured and brewers need to be able to understand how policies could affect their company in challenging times, he said.
“The correct policy placement is critical to the delivery of claim settlement,” Williams explained.
Corpsure recently decided to create two different policies because brewpubs, which have patrons within the premises drinking alcohol, pose different issues to production breweries.
Williams explained that policies for brewpubs need to take into account the issues that can arise when people consume alcohol.
“Brewpubs and breweries are two different risks and brewpubs carry higher exposure to both the brewpub and the insurer,” he said.
“There can be assaults or slips and falls for example, so it’s a different risk that we need to insure and it’s important that we get that right.
“We always put ourselves in a position to provide the correct advice and also obtain the right information to ensure we facilitate the correct placement.”
Breweries should consider operational risks
Williams said one of the main risks for breweries and brewpubs from a day-to-day operational aspect is machinery breakdowns.
“If components of the system break down, the cost to replace and repair those items and to keep the brewery operating at the same time can be quite expensive.”
Policies can also cover situations such as incidents from unintended fermentation with fruit products, through to cans exploding.
“If someone is injured, whether that be an employee working internally, or in distribution terms, it will be covered,” Williams explained.
Aside from the specific risks breweries and brewpubs face, they can also be covered from general risks such as fire, theft and major loss or storm.
Williams explained that with major loss in the situation you are unable to operate the brewery, loss of income can be insured so a rebuild can take place.
“There might be head brewers you want to keep on and in the event the business has to temporarily shut down that person still needs a job. Insured, you can continue to pay the head brewer to stay on board whilst the brewery gets rebuilt,” he said.
Leasing equipment such as kegs are also a common practice in the brewing industry, and in the case of keg theft, which has been a recent issue, Williams said brewers can also be insured for those thefts.
Individual needs to be analysed
He explained that the client’s business needs to be analysed to determine the most relevant and appropriate policy for them.
“When we discuss with a client we will always ask for turnover, and will generate a premium for liability based upon your turnover numbers, staff and what you do,” he said.
“If you are 90 percent brewery and 10 percent taps for consumption of alcohol, it’s likely that the 10 percent is a very minor component there, so we may not rate it as a brewpub.
“If it’s 50/50 you are going to fall under a brewpub type risk and while you will need to pay more to have the right cover, it’s insured correctly.”
Insurance is an important component to running a business and Williams said the team has worked closely with breweries, legal guides and has held roadshows to ensure the policies Corpsure offer are comprehensive and understood the specific risks breweries and brewpubs face.
“We’ve launched this to provide genuine advice to brewers and we’re excited to see where we land, ” said Williams.