There is a sense of gratification in watching a start-up grow. Many entrepreneurs enjoy the thrill of narrowing down on a niche, branding, and marketing. It’s for this reason that an investor may set up a distillery.
In addition, a distillery has a relatively low running cost and is more profitable than brewing. Even so, it’s essential to understand the costs and risks of running a successful distillery.
For example, production staff may make an ill-advised choice to ‘taste’ the whiskey during working hours, leading to intoxication. Unfortunately, high alcohol levels impair judgment, increasing the risk of work-related injuries.
That said, it’s prudent to acquire distillery insurance to shield your business from unforeseen losses and liabilities.
Here’s what you need to know about distillery insurance.
Ethanol, a flammable liquid, is one of the main ingredients in distilleries. During production, an accidental leak may occur via tanks, pipes, flexible hoses, or transfer pumps, causing a fire outbreak.
That said, distilleries face constant fire hazards.
Spirits and hard liquor are common distillation products containing ethanol, compounding the risk of fire in the distillery. Therefore, a fire hazard in a distillery exists due to raw materials, during fermentation, and with the final product.
Here’s a further breakdown of the hazards.
Here are further sources of possible ignition:
A distillery is a hazardous environment that can lead to injuries and physical harm without the necessary protection.
Here’s the breakdown of the hazards exposed to employees.
Without proper cleaning and safety gear, an employee is at high risk of falling and suffering an injury. The risk of falls is aggravated by a lack of handrails, loose electric cords, transition of floor types, and damaged ladder steps.
Ultimately, employees face an active risk of fall injuries like broken bones, cuts, brain injuries, spinal injuries, neck injuries, and severe cuts.
Employers are obliged by labor laws to provide Personal Protective Equipment(PPE)like gloves, industrial masks, aprons, and steel caps and boots. In addition, experts recommend distillery best practices like separating ignition sources, safe decantation, safe disposal of vapors, controlling spillage, and avoiding static electricity.
Inventory is both a current and strategic asset to the distillery. Accidental damage to the final product or raw material could lead to massive losses. That said, most distillers install alarms, access controls, and sprinkler systems to combat fire, theft, and other incidents.
Here’s a breakdown of risks that can lead to inventory loss in a distillery.
That said, consider applying best practices in storage facilities to avert the risk of contamination. Consider keeping liquor in tightly sealed bottles, avoiding heat or cold exposure, and minimizing direct or bright light.
A distillery is a machine-intensive operation that relies on different sets of equipment in the production workflow. Before a batch is ready for sale, it must pass through the mill, Lauter turn, fermenters, stripping still, and lastly, into the barrel.
Each set of machinery contributes to the quality and completeness of the product. For instance, a mash tun converts starch into sugar before fermentation begins. If the heating elements in the mash turn develop a mechanical issue, it can delay the current batch and impede the day's production.
Sometimes mistakes occur even when adhering to the best practices in the distillery. Sadly, a mistake can lead to a product recall. For instance, Apollo Bay Distillery issued a product recall because a batch of gin contained glycerol and hydrogen peroxide—active ingredients of a hand sanitizer.
Fundamentally, product recalls reduces the distillery's projected revenue. Remember, the affected distiller must notify customers, and suppliers, issue refunds, and other administration costs.
A distillery relies on a set of physical assets to run seamlessly, for example, machinery, furniture, computers, landscaping, inventory, personal assets, and sundry tools. These assets are exposed to typical risks like theft, vandalism, and fire damage.
It’s, therefore, essential to insure business property to mitigate loss when faced with the above risks.
Here’s the direct benefit of property coverage in distilleries.
Product withdrawal expenses meet the cost incurred by vendors, distributors, customers, and other parties concerning the recalled product. In addition, it covers the cost of litigation or legal defense.
What’s more, it covers the relatively expensive involuntary recall— required by a regulator or government.
The production line in the distillery business exposes employees to the risk of injuries, burns, or death. On the other hand, prolonged exposure to carbon dioxide may result in asthma, coma, increased heart rates, and convulsions.
Unfortunately, the distillery must cater to victims’ medical bills, follow-up care, lost income, and disability.
Lastly, some employees may seek legal redress after suffering an injury. In such a case, the worker's compensation helps to settle court costs, settlement, and legal fees.
Regardless of size, any business that sells alcohol needs liquor liability. In some cases, it’s mandatory to acquire liquor liability coverage as a prerequisite before opening your doors for business.
A distillery is obliged by the law to stop serving alcohol to a patron who’s almost intoxicated. Remember, consequential misdemeanors like drunk driving can attract legal liability to the distillery.
Ultimately, liquor liability coverage is vital protection for distilleries against legal liability.
This policy covers equipment breakdowns due to electrical or mechanical failures. First, it covers the cost of repairs or the replacement value of the damaged equipment. Secondly, if the broken machine halts production, the coverage reimburses lost sales and revenue.
Ultimately, equipment breakdown coverage averts consequential losses like revenue, missed orders, and legal suits.
Small and established distilleries acquire several vehicles to fulfill transport needs. For instance, a staff van to ease commuting challenges, delivery trucks, or SUVs for transporting executives.
Here are the benefits of commercial auto insurance to a distillery.
General liability coverage protects a distillery from the risk of legal suits directed at the business or employees. The most common sources of legal liability include bodily injury, medical payments, advertising errors, slander, libel, or property damage.
Any business that doesn’t acquire general liability coverage stares at the risk of legal liability, which can ruin its finances.
Although running a distillery is profitable and rewarding, it’s operated in a risky environment. It’s, therefore, prudent to acquire a responsive and dedicated distillery insurance professional. At FACE Insurance, we apply a customized approach to offer ideal distillery insurance solutions. Contact us online or call us at 916.721.2845 to learn more.
Your should contact the police as soon as possible. The quicker you act, the faster the authorities will be able to collect information regarding your stolen item. Your insurance agent should also be notified right after you have made contact with the police.
The most common way art is stolen is Burglary. It’s important that your installations have proper security in order to prevent these crimes from happening. Its also very important to make sure that the staff you higher to give your building maintenance has a clean record and has no criminal history.
Its responsibility of the insurance carrier to work with the FBI to recover the art that was stolen. It’s possible that you may be asked to work with the corresponding authority.
If your valuable art items are not insured, your efforts will have to be focused on working with the authorities to recover your stolen items. The odds of recovering your stolen items is very low.