Brewery Insurance – What you need to know

Today is national beer day and this classic alcoholic beverage popularity is booming once again.

The number of breweries in the UK rose by 7.5% in 2020. Breweries are seemingly bucking the trend of other industries that have suffered as a result of Covid-19 and the consumer demand is just getting stronger. UHY Hacker Young report says 55 new brewery companies were incorporated just during the first lockdown in the UK.

If you look back in the history books the earliest evidence of beer is 7000 years ago. In ancient Iran, scientists tested pottery which showed traces of this liquid gold. A 6000-year-old Sumerian tablet from ancient Mesopotamia depicts people consuming a drink from a communal bowl using reed straws. The oldest recipe for beer is 3,900 years old. It’s included in an ancient Sumerian poem that honours Ninkasi, the patron goddess of brewing. How has beer stood the test of time?

The real reason for the huge increase in sales is down to craft beer and the younger generation’s appetite for trying new beers. Craft beer gives the consumer the ability to experiment with a huge diversity of beer styles and taste profiles. The sustainability of the product is also key to its consumers. Products advertised as being sustainable made the product more attractive according to half of DSM survey respondents. Businesses have to back up the sustainability story. Craft beer fans are increasingly looking for some background information on the beer, like its ingredients and history. As a result of this increased demand, smaller independent breweries are being set up often referred to as microbreweries.

Microbreweries

Microbreweries differ from more traditional, large-scale brewers presenting their owners a unique set of risks that requires specialist insurance. Breweries are not the same as running a regular business. You must worry about machinery working properly, employee safety, guest safety, food preparation, discovering a bad batch of beer, and so on. You need a broker that understands your needs for insurance coverage to help you along the way. In this article, you will find out what you didn’t know about brewery insurance.

Brewery Insurance

Premise Liability

You may offer tours or have a taproom on-site for your brewery. If you are opening your property to the general public you are responsible for their well-being. As your guests are unaware of how your brewery operates and the possible hazard you have to ensure their safety. It is important that brewery tours are confined to safe areas only. You should have the routes planned out and signposted throughout. Public liability insurance is essential to protect you and your business. If an accident does happen and you can be held accountable for this.

Supply Chain

Beer recipes are often reliant upon specific ingredients for their unique composition. If a key supplier is unable to deliver it could cause a serious interruption to your production schedule. While holding reserves is an easy way to cover temporary interruptions to your supply chain. Sometimes it is not feasible because of cash flow or storage space. Keep a list of possible backup suppliers that be called upon in an emergency. This could mean the difference between keeping the production going and a temporary shutdown. You should also consider your business interruption insurance and adding a supplier extension. If your key supplies have a claim of their own and it stops your business you can claim your loss of earnings.

 

Microbrewery Insurance
Brewery Equipment
Equipment Breakdown

Given the relatively small size of most microbrewing operations, you are unlikely to have backup machinery to keep your production going if you have an equipment failure. If equipment is damaged or breaks down, you will have the costs to repair or replace it. But there is also a significant chance you have to suspend your brewing operation resulting in lost sales. Ensuring you have machinery cover will cover the cost of the replacement but it is also important to consider inspection cover and a maintenance program to minimise the risk of breakdown. Ensuring your equipment is able to continue operating.

Spoilage, Contamination, and Product Recall

No matter how diligent you are at producing a quality product, there can be times when situations beyond your control result in a batch of beer unfit for customer consumption. If the contaminated batch is caught before leaving the brewery, you face the cost of wasted material and production time, disposal, and the loss of revenue. If the batch makes it to sales it can be even more costly.

You will not only have the time and cost of replacing the contaminated product. But you also need to protect your brand during a recall. A poor product experience can be especially damaging for small brewery operations that rely heavily on word-of-mouth advertising. We can help with the time and cost through product recall insurance. If anyone consumes the contaminated product you may end up with a liability claim against you. This is when your product liability insurance will be key.

Let JMP help your microbrewery grow and prosper with our bespoke policies. Contact our commercial team. We can help ensure your microbrewery is protected from the unexpected and support you through risk management to help prevent the worst from happening.

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