Craft Brewer Insurance Essentials: Liability Coverage

Liability risks can be some of the most 

expensive claims for your brewery.

Last month, I used a metaphor to highlight the importance of brewery-specific insurance (vs. standard commercial insurance) to your business and bottom line.

• The “Domestics”: The 7 Essential Business Insurance Policies (that you should already have).
• The “Crafts”: Brewer insurance essentials that protect your brewery better than the standard commercial ("Domestic") policy.
• The 4 P’s: Four specific areas of your brewery that have unique coverage needs (“Craft”) that you most need to protect.

This month, I’ll go into detail on the first “P,” or essential area of “Craft” coverage: liability.

The two most essential ways to Protect your Passion, or at least the opportunity to pursue it (patriotic pun intended), are through brewer-specific General Liability and Liquor Liability coverage.

We protect our passion (our breweries) by protecting ourselves from Third-Party Lawsuits. General Liability and Liquor Liability are essential to your business and your bank account. If you’re up and running, you should already have these, but there are important distinctions between general and brewery-specific coverage that can make or break the future of your business in the event of an unexpected loss.

Have you ever had a patron get hurt at your brewery? Or received a demand letter from an attorney representing someone injured by one of your patrons after they left your brewery? Then you know all too well how crucial these policies really are. If you’ve been paying the premiums but haven’t yet had to cash in on them, know that they’re worth every penny. With millions of liability claims filed each year, these policies protect your business and assets from unexpected loss, which is especially important because liability risks can be some of the most expensive business claims. 

What Does It Protect? A general liability policy can protect you against costs that result from bodily injury (to patrons), property damage, medical expenses, legal costs, judgments, and personal injury claims such as libel and slander. If you rent or lease your space, commercial general liability (CGL insurance) may also provide coverage for damage to that workplace.

How Much Do You Need? The typical General Liability limit is $1,000,000 per occurrence and $2,000,000 aggregate for the year.

Tip: Umbrella policies can provide relatively inexpensive added protection, kicking in when you exhaust the limits of your business liability coverage.

Costs: Vary considerably depending on the specific risks of the brewery, but are traditionally based on annual sales volume.  As your brewery grows, it’s important to up your insurance coverage so that you have enough protection. Check in with your agent each time you consider expanding or changing your business.

What Does It Protect? This type of policy will protect the brewery from liability if someone files a claim regarding the sale of alcohol, such as someone being injured in a car accident after drinking at your tasting room. 

How Much Do You Need? A $1,000,000 limit is often recommended.  Even if an establishment is not found liable, the average cost to defend a claim is $150,000, and in Colorado the maximum limit for an award regarding the over-serving of a patron is $219,750. That’s just one claim! The nature of your business and its perceived risks will help determine your needs. Work with an agent who is experienced in craft brewery coverage when seeking business insurance quotes. You’ve put blood, sweat, and tears into building your company. You need coverage that works just as hard to protect it.

Costs: Policy costs vary widely based on your brewery’s size and location and, again, is based on annual sales volume.

Why Choose A Brewery-specific Policy? 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 who claim to have been over-served at your establishment. The sale of growlers/bombers adds another brewer-specific exposure that should be addressed by your liquor liability policy. Some carriers don’t understand the craft brewing world and the environments they create. They run from businesses that they consider “bars,” because of the liability that they carry and this lack of a full understanding of the business. Be sure the carrier you are with is comfortable with everything that you are.

Finding Brewery-Specific Coverage: Confused about where to start? As an independent agent and brewpub owner, I specialize in customized insurance policies for breweries of all sizes. I can assess your liability risks and recommend the appropriate coverage, balancing both your risk management and cost saving strategies.

Contact me, John Jacquat, for a free policy assessment and make sure your brewery assets are properly insured. Or email me at john@purerisksolutions.com.

Filing claims can double your auto insurance premiums

Before filing an insurance claim, drivers should consider the effect it can have on their premiums. 

Many people file claims for less costly repairs, like cracked or chipped windshields or small dents. We like this article because it serves as a good reminder to think twice before filing a claim for something small that may cost you less, in the long run, to fix yourself.

The same applies to Homeowners insurance as well. (Read this post we recently shared on Facebook for tips on when not to file a home insurance claim.) 

Insurance is designed to be used for catastrophic events, not to be used as a "maintenance policy." Often, it's in your best interest to check with your agent before filing a claim, and to actually pay it out of pocket instead of turning the claim in to your carrier. The reality of the matter is, most consumers want to get every penny that they can out of their insurance carrier, because they feel taken advantage of by paying so much into their policy premiums and getting nothing out of it. We can't tell you how many times we hear "that's why I have insurance," from our clients and friends. Still, our job as agents is to educate and have them think twice, and consider the consequences of turning in too many claims, which is not to their advantage and will cost more in increased premiums costs in the long run.

Health Care Reform News: IRS issues update on employer penalties

The Internal Revenue Service (IRS) has issued new FAQs to make clear the penalties employers may get, if they decide to offer pre-tax monies to their workers so they can buy individual insurance.

The IRS calls this an employer payment plan. It's viewed as a group health plan, but it doesn't meet the Affordable Care Act (ACA) rules.

For example, employer payment plans do not meet parts of the ACA that give workers certain preventive care benefits at no cost share. Because employer payment plans do not meet all ACA rules, employers may be taxed $100 per day for each employee this applies to. (That adds up to $36,500 per year, per worker).

For more details on this update, or questions regarding how this affects your business, contact Dave Godel.

Information Source: Anthem Blue Cross Blue Shield Employer News 

Technology ‘of the future’ helps policyholders today

Hail data, shown in red and yellow, overlays
policyholder locations, shown as dots.

When your home or business is damaged by a hail storm, you deserve a prompt response from your insurance company to assess the damage and process your claim so that repairs can begin as soon as possible.

• What if your insurance company could track hailstorms and know immediately how many policyholders might be affected, helping it to assign extra resources to process claims quickly?
• What if your insurance company had the ability to determine the size of hail that struck any given location within the past five years?
• Imagine how the use of aerial data could help the company write detailed roof repair estimates.

While this may sound like science fiction, you don’t need to stretch your imagination. The technology to do all these things is being used today by The Cincinnati Insurance Company and by many other insurers. When technology is used in combination with personal service from a locally based claims professional, policyholders receive a better claims experience.

Hail analysis technology – combined with policyholder databases – can help determine the number of policyholders in a geographical area that may have hail-related claims. This is especially important in catastrophe situations so that your insurance company can deploy a sufficient number of insurance claim professionals to process claims.

Hail analysis and verification technology can accurately determine the size of hail that struck the ground at a given location. This knowledge, in conjunction with an on-site property inspection, determines whether a structure suffered damage by hail or some other cause.

High-resolution aerial imaging can provide pictures showing all of the roof’s dimensions – data that can be downloaded into a claim estimating system. This process provides a detailed repair estimate, enabling a policyholder to receive a settlement check more quickly.

Having this information available helps thwart unscrupulous roofing companies from taking advantage by pressuring homeowners into signing contracts to repair a roof when there is no damage. By reducing potential payments on fraudulent claims, the technology helps contain insurance costs for everyone.

Submitted by Marty Skidmore for The Cincinnati Insurance Companies