Craft Brewery Insurance – Tapping Potential
Along with red and black lumberjack plaid as well as the iconic stubby beer bottle making a cultural comeback, the Canadian beer industry is in expansion mode. In particular, the growth of craft breweries focused on unique, small batch brews is exploding.
Small Business Accelerator – a division of the Irving K. Barber Learning Centre of the University of British Columbia – reports that “according to Agriculture and Agri-Food Canada in their report, The Canadian Brewery Industry, approximately 10 million Canadians drink beer and the sales of goods manufactured by the Canadian brewery industry in 2009 were worth $4,671.2 million. The Brewers Association of Canada states that beer brewed in Canada accounts for 1.2% of Canada’s GDP, 190,000 direct and indirect jobs and $4.3 billion in tax revenue.”1
New craft breweries are opening their doors and, as with every new venture, with growth there comes inherent risk.
Craft Brewery Insurance Explained
The number of breweries in Canada has grown to more than 200 and specialized associations like the Brewers Association support this growing industry. Of the breweries currently in operation, 98 percent are considered regional craft brewers, microbreweries or brewpubs.
Recognizing this trend, insurers are now offering craft brewery insurance policies to address the unique exposures faced by this expanding section of the industry. Given their size and average output, the needs of craft brewers vary greatly from the larger multinational breweries.
4 Key Craft Brewery Coverages
In addition to the general liability and property coverages that almost every business should carry, the following policies help protect against common exposures faced by craft brewers and should be part of every craft brewery insurance program:
- Boiler and Machinery Coverage: Proper craft brewery insurance coverage can help with repair or replacement costs for equipment breakdown from events caused by pressure vessels as well as cover losses resulting from production interruption and downtime.
- Supply Chain insurance will cover losses resulting from decreased production or increased production costs in the event that one or more of your suppliers is unable to provide the raw materials you need due to an insured event.
- Spoilage and Product Recall: If a batch of beer is contaminated during the brewing or packaging process or spoils before distribution, a provision for spoilage coverage in a well-structured craft brewery insurance program can cover the initial production cost as well as lost revenue. Product recall can help offset the costs of removing the tainted product and replacing it and should be considered as part of every craft brewery insurance program.
- Liquor Liability: Regardless of whether you have a full-service bar or offer beer tastings after tours, liquor liability is essential to cover damages to persons and property caused by patrons and customers consume your products and or allege they were over-served by your establishment.
Are you founding or investing in a craft brewery? Learn about how craft brewery insurance can protect your investment. Speak to an ALIGNED Insurance Advocate to talk about your business insurance needs or contact us at 1-866-287-0448.
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