What You Should Know About Your Insurance Program Written by Peter J. Whalen
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hile securing proper insurance coverage is clearly not one of the most exciting or pleasant responsibilities that a distillery owner or manager has to deal with, it is certainly one of the most important. At the risk of sounding a bit dramatic, property and liability insurance is the one thing standing between you and bankruptcy after a severe claim, such as a fire or a death. There are a few things to Property consider when going into the marketplace and liability with the goal of securing the best way to insurance is protect yourself from the financial damage the one thing that can occur from an accident. standing The best advice that I can start with is between you for you to make sure that you are dealing and bankruptcy with insurance professionals who underafter a severe stand distilleries. Your local agent may be a claim, such as a great person/friend and they may be exfire or a death. cellent at protecting your home, autos, or any other businesses that you may own, but this doesn’t mean that they are the best choice to insure your distillery. You shouldn’t have to educate them on the nuanced risks that distilleries face each day. W W W . ARTISANSPIRITMAG . C O M
There are four major parts to a comprehensive insurance package.
1)
Property includes your building (if you own or are required by lease to insure it) and contents such as your equipment, raw ingredients, finished stock, and office furnishings. An extremely important part of property coverage, especially for distillers, is business interruption. This will be discussed in greater detail below.
2)
Liability addresses your premises (slips and falls), your products (chips of glass or contaminants in bottles), or liquor liability exposures such as assault and battery (fights) and bodily injury from car accidents involving alcohol overconsumption.
3)
Worker’s compensation covers medical bills and lost wages that an employee suffers from a work-related accident. It also protects an employer from a lawsuit if the worker decides to sue for gross negligence rather than accept the normal benefits. This is rare.
4)
Auto insurance isn’t always needed. However, if your distillery self-distributes or has any vehicles in the company name such as the owner’s personal car or a truck that performs various jobs, you will need to purchase this coverage.
The overview above is just a brief summary of what an insurance program includes. It is not intended to address all of the coverage that an individual distillery requires in order to consider themselves properly protected. Two types of insurance coverage deserve a little more attention. I mentioned the first one earlier – business interruption. It pays for any ongoing expenses that you continue to have while rebuilding after a loss and it is often under appreciated. If you have a major claim, such as a fire, you could be out of business for an extended period of time. Some expenses cease, such as the purchase of your ingredients and salaries for some of your staff, 35