How Winery Insurance Can Protect Your Business
Insurance isn’t generally the first thing a viticulturist considers when establishing a vineyard or opening a winery. Yet the diverse risks you face – from wildfires and online security to theft and injuries – require measured consideration and comprehensive coverage.
Like other businesses in agriculture, there are many factors beyond your control, and losses can occur at each step of the winemaking process. Working with an insurance professional who understands the industry is crucial to considering potential losses at every phase of your operations. In addition to the risks mentioned above, you face the risk of:
- Pesticide or insecticide damage
- Spoilage due to refrigeration breakdown, contamination, or a power outage
- Winemaking or agricultural equipment malfunction leading to other damages
- Problems relating to harvesting, supply chain, or logistical operations
Guest Interactions and Implications: The Human Element
Visitors, employees and even online criminals pose risks to your business as well.
Liability – 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?
A commercial liability policy will provide fairly broad protection against third-party injury or property damage suffered at your winery, but you should consider obtaining adding liquor liability to your policy to help protect you against losses caused by an intoxicated person.
Employment issues – Nearly every state requires workers’ compensation, and requirements vary by location. And agricultural businesses should consider employee crime and employment practices liability coverage, which can help with monetary loss and attorney fees.
Cybercrime – Hackers in search of vulnerable computer networks and unprotected websites can cause serious damage to a winery or vineyard. A data breach may release sensitive customer or vendor data or shut down your computerized operations. A strong cyber liability policy may help with forensics, data recovery, third-party notification, and costs related to third-party claims or lawsuits.
Nature’s Wrath: Preparing for Extreme Events
Few businesses are more vulnerable to storms, floods, fires, and natural catastrophes than a 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. In 2020, fires ravaged California’s Napa Valley – just three years after 2017 fires had caused over $68 billion in losses to the same region – and devastating May frosts crippled New York vineyards. Even vineyards far from a fire can be affected. For example, phenols from wildfire smoke can taint the skin of grapes and ruin their taste in just a matter of hours.
Tailoring Your Coverage for Winery Insurance
Given the varied risks and unique nature of your agribusiness, be sure to confirm the details of your insurance policies. As examples:
- Is there an accurate description of your wine stock?
- Are raw materials and/or finished goods covered?
- Does your inventory loss protection cover damages during transit?
- What specific causes of contamination are covered? Are you protected from instances of human error, cleaning agents, pesticides, arsenic, and fungus?
- Does coverage differ depending on when contamination is discovered, either on your premises or at a retailer?
- Which natural events are covered by your crop insurance? Do you need specific coverage added to address losses caused by windstorms, floods, wildfires, or earthquakes?
- Will you be asked to prove that you did everything possible to avoid weather-related damages, including proper planting times or early harvesting?
- Does liquor liability extend to off-site locations where you may be selling or sampling your wines?
Your Winery’s Insurance Ally: Westfield Insurance