Winery Insurance For Canadian Vineyards
According to a major research study conducted by the Canadian Vintners Association, a single homegrown bottle of wine generates approximately $31 in domestic economic impact. In fact, this growing $6.8 billion dollar industry is pouring value into many areas of the Canadian economy:1
- “The wine and grape industry is responsible for more than 31,000 jobs in Canada from manufacturing, agriculture, tourism, transportation, research, restaurants and retail.
- Wine-related tourism welcomes more than 3 million visitors each year, generating more than $1.2 billion annually in tourism revenue and employment.
- The wine industry generates $1.2 billion in federal and provincial tax revenue and liquor board mark up.
- Canadians enjoy over 1 billion glasses or 220 million bottles of wine produced by the Canadian wine industry each year.”2
Related Matters: The Economic Impact of the Wine and Grape Industry in Canada 2011
7 Common Exposures Covered By Winery Insurance
Operating any scale of winery opens the door to a variety of business risks. From worrying about a late spring freeze to serving alcohol to wine country tourists, operating a vineyard and managing risk go hand-in-hand. Common industry risks that can be addressed by winery insurance include:
- Crop risks. Grapes are highly susceptible to hail, drought, floods, pests, infections, bacteria and other forms of damage. These problems have the potential to wreck more than a year’s production, since vines need time to re-establish themselves before they can return to their regular output after extensive damage.
- Contamination. Because the purity of the grape is so deeply connected to the taste of the end product, contamination is a major liability. From the vine to the finished product, contamination can occur at nearly any point in the process. Whatever the case, if a crop’s quality is compromised, it could make some or all of the grapes unusable.
- Intellectual property. The unique root stock that grapes come from can be considered intellectual property. Whether you grow your own grapes or purchase them, use of unlicensed root stock or their produce could constitute patent infringement. Intellectual property claims can also arise from labelling conflicts where one party copies some or all of another party’s label design. Costs can be incurred if you are sued by someone else or if you have to take actions against a company guilty of infringing on your brand.
- Product recall. Every manufacturer faces the possibility that an issue could be found with a product after it has been distributed. A product recall can involve lost time, extra shipping charges and losses associated with not having a sellable product available for consumers. Even if you are not responsible for a product recall, widespread damage to the industry can occur if another wine product erodes consumer confidence.
- Storage and shipping. To preserve quality, special precautions may need to be taken during storage and shipping. If a product is stored offsite or transported by an outside party you still may be responsible for the product’s safety.
- Liquor liability. While liabilities from the manufacture of alcohol are limited, if you are involved in retail sales directly to the consumer or if your winery hosts tastings or other events that serve alcohol, your liability will increase as you could be held responsible for damages that result from over serving guests or serving minors.
- Occupiers Liability. If you are only involved in production, premise risks should be rather limited. However, if you offer tours, host events, run an onsite retail shop or are involved in any other function that opens your business to the public, you increase the chance that a non-employee will be injured on your property. Based on the cause of injury, you as the property owner could be held liable.
A Blend Of Options For Canadian Vintners
Each bottle of wine is unique. From the varietal to the terroir to the growing season, many elements contribute to the final product. Just like a vintage bottle, when it comes to winery insurance, one size does not fit all. An in-depth analysis of the specific exposures that your vineyard faces is the best way to confirm the value of your winery insurance coverage.
To learn about winery insurance options, talk to an ALIGNED advocate today about how we can help you secure the best products, services and solutions for your business.
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100% Canadian owned, ALIGNED is a premiere insurance brokerage that serves more than 1,400 clients across the country. ALIGNED’s offices in Toronto, Calgary and Vancouver are supported by a national operations centre in Cambridge, Ontario. Uniquely within the industry, ALIGNED creates, negotiates and delivers the best business insurance and risk management strategies/solutions to organizations like yours.
Sources: This Coverage Insights is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice. © 2011-2013 Zywave, Inc. All rights reserved.
1,2 Canadian Vintners Association