Winery Insurance Policy Information
Winery Insurance. Wineries grow or purchase grapes and process them into wine. Some wineries still use manual labor to harvest grapes while others use mechanical harvesters. The grapes are fed through a destemmer and crushed. Skins may be removed or left on during fermentation, depending on the type of wine being produced. Sugar, yeast, carbon dioxide, or flavorings may be added. Fermentation can be done in oak barrels or stainless-steel tanks.
Testing is done periodically to check status of the wine. Once fermentation is completed, the wine is strained, bottled, and labeled for sale to restaurants, retailers, or wholesalers. Some wines require storage time from a few months to several years to develop optimum quality. Wineries may have a retail store selling to the public or facilities for on-premises consumption, such as a wine-tasting area or a full-service restaurant.
Running a winery is not always easy. There are many complex things and situations you must be prepared for to effectively run your vineyard. Owning a winery means you're responsible for the harvesting of crops to make wine. There are many risks when you are in the winery business. For this reason, you need protection for your business. The way for you to effectively protect your operation is to get the right winery insurance policies for your business.
Winery insurance protects your vineyard from lawsuits with rates as low as $77/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked winery insurance questions:
- What Is Winery Insurance?
- How Much Does Winery Insurance Cost?
- Why Do Wineries Need Insurance?
- What Type Of Insurance Do Wineries Need?
- What Does Winery Insurance Cover & Pay For?
What Is Winery Insurance?
Winery insurance is a type of insurance coverage that is specifically designed for the owners and operators of wineries. This insurance provides financial protection for a variety of risks associated with winemaking, including damage to crops, machinery, and buildings, as well as liability for injuries that occur on the winery property.
The insurance may also cover product liability, such as contamination of wine products or injury caused by broken glass. In addition, winery insurance may provide coverage for business interruption and other financial losses, such as loss of income due to a natural disaster or other unforeseen event.
How Much Does Winery Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small wineries range from $77 to $157 per month based on location, size, payroll, sales and experience.
Why Do Wineries Need Insurance?
As a winery owner, you are responsible for the safety and well-being of your employees, customers, and the public. Wineries are also responsible for the production, storage, and distribution of wine, which can result in potential accidents, property damage, and liability claims.
Additionally, wineries face unique risks such as damage to wine from extreme weather conditions, theft or spoilage, and lawsuits from customers who may become ill or injured while visiting the winery. Insurance helps protect wineries from financial losses due to these and other risks, including:
- Property damage: Wineries need insurance to protect their facilities, equipment, and wine from damage caused by fire, theft, or natural disasters.
- Liability: Liability insurance protects wineries from lawsuits and claims related to customer injuries, product liability, and other issues that may arise on their property.
- Business interruption: Wineries may also need insurance to protect against loss of income and expenses incurred in the event of a natural disaster or other unexpected event.
- Product liability: Product liability insurance protects wineries from lawsuits and claims related to illnesses or injuries caused by a wine product.
Overall, wineries need insurance to protect their assets, employees, and customers, and to ensure that they can continue operating their business even in the event of a loss or accident.
What Type Of Insurance Do Wineries Need?
To keep your business protected from risks you need to have winery insurance. To adequately protect your business you should have property, liability, commercial auto, liquor and other winery insurance policies.
This is to protect your winery in the case of a lawsuit. Below are some explanations of the different types of commercial winery insurance coverage you can buy:
Property Coverage - Having this type of winery insurance in your business protects the building and their contents. In the event that they buildings you use to run your business are damaged this insurance keeps you covered. It also protects the inventory of your business. If there is ever an interruption in your business then having this type of insurance provides coverage for the expenses associated with the loss of property.
Tank Collapse Coverage - A container, tank, barrel or vessel can collapse and cause your business to lose profits. This is why having this type of insurance for you business is crucial.
Contract Cancellation Coverage - If you cannot fulfill a contract you have with a customer, then contract cancellation keeps you covered. Let's say you can't fill an order because your supply is short and you are sued when you have this insurance attorney fees, marketing expenses and different costs are covered.
Tank Leakage Coverage - If a tank begins leaking after you've made the wine or during the process of then this coverage protects your business. To avoid the cost that comes with this, you should get tank leakage coverage for you winery.
Crop Insurance - The most important part of your business is the grapes you use to make the wine. Without grapes, it's impossible for you to run your wine business. Protection of the grapes is important to keeping your business functional. If for some reason the crop you're growing is damaged then you'll be protected with this coverage in your business. You must note though that crop insurance does not protect your grapes after they've already been harvested. If your grapes are destroyed by an earthquake or you, live in a place where they could be then getting earthquake insurance may be a good move for your business.
Wine Storage Or Transit Coverage - When you have gone through the process of harvesting your grapes, you must ensure to keep them protected. Wherever you store your grapes, you'll need protection for them. This is where wine in storage or transit coverage comes in. Speaking with an experienced insurance agent will help you to find the policies to protect your grapes whether they are on site or off.
General Liability - This broad winery insurance protection is good for your business if there's ever bodily harm or damage caused to a third party or their property.
Equipment Breakdown Insurance - While using machinery in your business, there's always the chance the machinery could breakdown. For this reason, you should have protection when it does. This insurance pays for the repairs or interruption cost caused by the breakdown of equipment.
Contamination and Spoilage Coverage - When you operate a vineyard, you'll need protection from losses that occur because of contamination. Having this insurance keeps your covered if there's a batch that's lost due to contamination.
Liquor Liability Coverage - Once you are in the business of selling alcoholic drinks, you must protect your business with winery insurance. This is to protect if there is bodily harm as a result of selling alcohol. You can never predict what using alcohol might do a person, and if someone gets hurt or killed in a drunk driving accident - you might be sued.
Workers Compensation - If an employee gets injured on the job, you can protect your business from lawsuits when you have workers' compensation. In most states is is required by law for any non-owner employees. Any medical costs associated with an employee that's injured on the job is covered with workers comp.
To protect your business from the expenses of lawsuits you need to have the right commercial insurance in place. To get the right protection, you need to speak with an experienced insurance agent.
Wineries' Risks & Exposures
Premises liability exposures are light if visitor access is limited. If there are retail sales, tours, restaurants, wine-tastings or bed and breakfast inns, the exposure increases. The serving of alcoholic beverages to customers can impair motor abilities and increase the likelihood of trips, slips or falls. Spilled drinks should be cleaned up promptly. Floor coverings must be in good condition with no frayed or worn spots on carpet and no cracks or holes in flooring.
Exits should be clearly marked and free of obstacles. Adequate interior and exterior lighting should be available in the event of a power outage. Parking lots and sidewalks need to be in good repair, with snow and ice removed, and generally level and free of exposure to slip and falls.
Products liability exposures are moderate due to the possibility of contamination, spoilage, foreign objects in containers, improper labeling of contents, or explosion of a carbonized container. Effective procedures are required to ensure sanitary working and processing conditions. The workplace must meet all Food and Drug Administration (FDA) specifications and be arranged so that foreign substances do not enter processing areas.
An on-site testing laboratory is recommended to verify quality control. Controls must be in place to prevent contamination from exposure to chemicals used to contain insect or rodent infestations, such as insecticides and pesticides. Warning labels must be in place indicating the potential damage of alcohol to unborn children. An effective recall program that can be activated immediately must be established.
Liquor liability exposures are from the manufacturing of alcoholic beverages. The exposure increases if there are retail sales, tours, and other events where wine is sold directly to the consumer. Failure to comply with state and federal regulations may result in the loss of a liquor permit which will close the business.
All employees who serve wine to customers must be trained in recognizing signs of intoxication. A procedure should be in place to deny service to underage or intoxicated patrons. Online sales present an even greater exposure because of the possibility of products being purchased by underage persons.
Environmental impairment liability exposures can be high due to the potential for air, land, or water pollution from the use of agricultural chemicals and pollutants such as fertilizers, herbicides, pesticides, refrigerants, motor vehicle fuels, and solvents. Storage, use and disposal of all chemicals must be documented and meet all FDA and EPA standards.
Workers compensation exposures can be moderate to high depending on the degree of mechanization. The more mechanized the manufacturing process, the less likely that employees will slip, fall, or sustain hernias or other lifting injuries. However, they are more likely to be injured by the machinery, particularly during destemming and crushing operations. If operations rely on manual labor, training, supervision, and communication are important in maintaining a safe work environment.
Foreign objects in the eye or hearing impairment from noise may occur. In aging and storage areas, vats should be secured to prevent falling and crushing employees. Forklifts should be equipped with backup alarms and be refueled in well-ventilated areas. Exposure to farm chemicals and organic dust can lead to respiratory issues.
Crop exposures are high because growing grapes are in the open and are susceptible to damage by animals, bacteria, drought, flooding, frost, fungi, hail, insects, lightning, snow, viruses, weeds, wind, and winterkill. While some of these can be mitigated by proper farming practices or chemical applications, others are random acts that may or may not be covered by insurance. Vines are often grafted from much older vines and take years to reestablish if they are killed.
Property exposures are from electrical wiring, heating and refrigeration equipment, and processing machinery. All machinery must be inspected and maintained regularly to avoid wear and tear or overheating losses. Wiring must be up to date and of sufficient capacity. All machinery should be grounded to prevent static buildup and discharge.
Grapes, wine in process, and stored wine are very sensitive to changes in temperatures. Temperature-monitoring devices should be mandatory and installed in most processing and storage areas. Even a small fire can result in mandatory destruction of all wine in process as well as stored wines due to the possibility of smoke contamination. Processing areas should be separated from storage areas.
Product ready for shipping should also be kept in a separate area, especially if a required tax stamp has already been affixed. Business income exposure may be high due to the use of specialized machinery and equipment that may be difficult to repair or replace quickly.
Equipment breakdown exposure is high due to the automated machinery and equipment which can malfunction or break down. All machinery and equipment must be regularly inspected and maintained as a lengthy breakdown to machinery could result in severe loss, both direct and under time element.
Crime exposures are from employee dishonesty and money and securities. Pre-employment background checks should be done on all employees having access to the inventory. There must be a separation of duties between persons handling deposits and disbursements and handling bank statements. Some wineries offer tours and operate retail stores, resulting in excessive amounts of cash and credit card transactions.
Receipts should be issued for any cash payments received. Wine can be expensive and targeted by both employees and thieves. Loading docks should be supervised to minimize employee theft of finished goods.
Inland marine exposures include accounts receivable if the winery bills customers, computers (which may include computer-run production equipment), goods in transit, mobile equipment, and valuable papers and records. If goods in transit are damaged by collision or overturn, there may be no salvage due to the potential for food contamination. Equipment includes farming equipment such as harvesters. Records include inventory, quality control, proprietary formulas, purchases, and sales information.
Commercial auto exposures can be extensive. During planting and harvest times equipment must be moved from field to field. The equipment is awkward and slow moving and often must travel over winding rural roads and highways. The use of All Terrain Vehicles (ATVs) and similar mobile equipment/auto type vehicles is common. Drivers must have appropriate licenses and acceptable MVRs. All vehicles must be well maintained with records kept in a central location.
What Does Winery Insurance Cover & Pay For?
Winery owners, like any business owners, may face potential legal liabilities that could result in lawsuits. Some common reasons wineries may be sued include:
- Personal injury: If a customer or visitor to the winery slips and falls, sustains an injury, or becomes ill due to a hazardous condition on the winery premises, the winery owner may be held liable for the resulting medical expenses, lost wages, and other damages.
- Product liability: If a consumer claims that they were harmed by a defective or contaminated wine product, such as suffering from food poisoning or adverse health effects, the winery owner may be sued for product liability.
- Employment-related disputes: Winery owners may face lawsuits related to employment issues, such as discrimination, harassment, wrongful termination, or wage and hour violations, brought by current or former employees.
- Intellectual property infringement: Wineries may be sued for trademark or copyright infringement if they use branding, labeling, or logos that are similar to those of another winery or beverage company, leading to confusion among consumers.
- Contract disputes: Wineries may face lawsuits related to breach of contract, such as disputes with suppliers, distributors, or vendors, or disagreements over lease agreements, purchase contracts, or other business contracts.
Insurance can play a crucial role in protecting wineries from the financial impact of these lawsuits. Here are some examples of how insurance can help pay for the lawsuits:
General Liability Insurance: This type of insurance provides coverage for bodily injury and property damage caused to third parties, including customers or visitors to the winery premises. It can help cover medical expenses, legal defense costs, and damages awarded in a lawsuit related to personal injury.
Product Liability Insurance: This type of insurance specifically covers damages resulting from defective or contaminated products, such as wine. It can help cover legal costs, settlements, or judgments in a lawsuit related to product liability claims.
Employment Practices Liability Insurance (EPLI): This type of insurance provides coverage for lawsuits related to employment-related disputes, such as discrimination, harassment, wrongful termination, or wage and hour violations. It can help cover legal defense costs, settlements, or judgments related to these claims.
Intellectual Property Insurance: This type of insurance provides coverage for claims related to intellectual property infringement, such as trademark or copyright infringement. It can help cover legal costs, damages, or settlements related to these claims.
It's important to note that insurance policies have limitations and exclusions, and the specific coverage and limits may vary depending on the policy terms and conditions. It's essential for winery owners to carefully review their insurance policies and work with an experienced insurance professional to ensure they have appropriate coverage in place to protect against potential lawsuits and associated financial risks.
Commercial Insurance And Business Industry Classification
- SIC CODE: 0172 Grapes, 2084 Wines, Brandy and Brandy Spirits
- NAICS CODE: 111332 Grape Vineyards, 312130 Wineries
- Suggested Workers Compensation Code(s): 0079 Farm - Berry or Vineyard & Drivers, 2143 Winery & Drivers
Division A: Agriculture, Forestry, And Fishing | Major Group 01: Agricultural Production Crops | Industry Group 017: Fruits And Tree Nuts
0172 Grapes: Establishments primarily engaged in the production of grapes.
- Grape farms
2084: Wines, Brandy and Brandy Spirits
Division D: Manufacturing | Major Group 20: Food And Kindred Products | Industry Group 208: Beverages
2084 Wines, Brandy and Brandy Spirits: Establishments primarily engaged in manufacturing wines, brandy, and brandy spirits. This industry also includes bonded wine cellars which are engaged in blending wines. Establishments primarily bottling purchased wines, brandy, and brandy spirits, but which do not manufacture wines and brandy, are classified in Wholesale Trade, Industry 5182.
- Brandy spirits
- Wine cellars, bonded: engaged in blending wines
- Wine coolers (beverages) Wines
Winery Insurance - The Bottom Line
There are many risks that winery's face depended on what products and services they offer. Speak to an experienced broker to find the best fit coverage for your winery operations.
Additional Resources For Food Service Insurance
Learn about restaurants, bars, liquor stores commercial insurance coverages. See how small business food service insurance help protect against accidents, oversights and lawsuits resulting from business operations.
- Bagel Shop
- Coffee Shop
- Concession Stand
- Farmers Market
- Grocery Store
- Ice Cream Shop
- Internet Cafe
- Liquor Liability
- Liquor Store
- Sandwich Shops
- Specialty Food And Restaurants
The food service industry is a vital part of the economy and plays a crucial role in providing food to individuals and businesses. However, it is also a high-risk industry that is prone to numerous potential liabilities and risks. That's why it's important for food service businesses to have insurance in place to protect themselves against financial losses and legal issues.
One of the main reasons the food service industry needs commercial insurance is to protect against liability claims. When running a food service business, there is a risk of someone getting sick or injured due to food poisoning or food allergies. Insurance can provide coverage for these types of claims, helping to cover the costs of legal fees and damages.
Another reason the food service industry needs insurance is to protect against property damage. This can include damage to the business's physical location, such as from a fire or natural disaster, or damage to equipment, such as kitchen appliances. Commercial insurance can help cover the costs of repairs or replacement, ensuring that the business can continue to operate smoothly.
Additionally, commercial insurance can provide coverage for losses due to unexpected events, such as theft or vandalism. This can be especially important for food service businesses, as food products and equipment can be expensive to replace.
The bar and liquor industry is highly susceptible to accidents and injuries. With the presence of alcohol, there is a higher risk of slip and fall accidents, fights, and other mishaps that could result in serious injuries to employees or patrons. Insurance can provide coverage for these types of incidents and help protect the business from financial liability.
In summary, business insurance is essential for the food service industry due to the numerous risks and liabilities that can arise. It can provide financial protection against potential losses and legal issues, helping businesses to operate safely and securely.
Minimum recommended small business insurance coverage: Business Personal Property, Business Income and Extra Expense, Spoilage, Equipment Breakdown, Employee Dishonesty, Money and Securities, Computers, Valuable Papers and Records, General Liability, Employee Benefits, Umbrella, Hired and Nonowned Auto & Workers Compensation.
Other commercial insurance policies to consider: Building, Earthquake, Flood, Leasehold Interest, Real Property Legal Liability, Accounts Receivables, Bailees Customers, Fine Arts, Cyber Liability, Employment-related Practices, Environmental Impairment, Liquor Liability, Business Automobile Liability and Physical Damage, Garagekeepers and Stop Gap Liability.