Winery insurance isn't generally the first thing a viticulturist thinks of when endeavoring to become a winery or vineyard owner. But as any accomplished wine entrepreneur can tell you, the profession requires a considerable amount of hard work and upkeep. They can also tell you that, while it can be an immensely fulfilling vocation, owning a winery or vineyard comes with a wide range of significant risks.

The production of high-quality wine is a result of highly sophisticated management and operations. Many things have the potential to go wrong during the production process. While some factors can be closely monitored by the owner (such as staffing, managing equipment and marketing the business), other factors are subject to forces beyond their control.

Here's a brief overview of these risks:

• Pesticide or insecticide damage
• Spoilage of damaged grapes due to refrigeration breakdown, contamination or a power outage
• Damage to in-process and aging wine goods
• Winemaking or agricultural equipment malfunction
• Problems relating to harvesting, supply chain or logistical operations
• Expenses linked to business interruption

   

A host of additional risks awaits even the most enthusiastic vintner. One of the most imposing risks involves liquor liability and anything that can happen when you invite the public to your premises.

The Human Element

Many wineries offer vineyard tours, wine-tasting events, weddings and other occasions for people to gather on their grounds. In such circumstances, there's always the chance that someone may imbibe too much and cause damage to themselves, others or the property. What happens if a customer becomes sick after drinking wine or eating your appetizers? No thriving wine business can afford to be legally exposed by the sale or serving of alcohol.

The human element factors in with your personnel, too. There are workers' compensation concerns to be addressed, as well as any theft or vandalism that's caused by disgruntled or former employees.

And, like virtually every small business operating today, there's an ongoing threat of cybercrime. Hackers in search of vulnerable computer networks and unprotected websites can cause irrecoverable damage to a winery or vineyard. As with other businesses, any release of sensitive customer or vendor data may result in the tarnishing of a brand, from which few wineries can hope to recover

Extreme Weather Events

Now consider the weather. Extreme weather events are far more commonplace than ever before and few business enterprises are as vulnerable to storms, floods, fires, earthquakes, etc., as a modern-day vineyard. Bad weather can jeopardize the growth and production of grapes, and any resulting crop damage can wreak havoc on profit and cause significant loss.

The recent devastating fires in California are just one example of this risk. As Bloomberg News reported of wineries in Napa Valley, "Though the majority of grapes have already been picked for the season, the smoke effects on those remaining may mean they have to be thrown out, diminishing this year's vintage."

Custom-Tailored Insurance Solutions

So, what's the most effective way to address these risks? The best solution is comprehensive vineyard and winery insurance coverage. This encompasses outdoor vines, growing grapes and trellises, as well as all other components of the vast winemaking enterprise.
Look for an insurance company with an extensive background in agribusiness and in-depth expertise in the wine industry. It's important to work closely with your insurance agent to find coverage that fits the unique needs of your business. The more experienced they are in the industry, the better off you will be.

Winemaking is — and always has been — a labor of love. It may be a family business that's been handed down from one generation to the next, or an exciting new venture for ambitious entrepreneurs. In either case, no such business can hope to "survive and prosper" without comprehensive insurance coverage.