Best Insurance for Breweries

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Contributor, Benzinga
September 8, 2020

Small breweries can be big business, but beer brewing isn’t without risk. The right brewery insurance package can help ensure your business continues to thrive even if a bad batch of luck threatens the brew. 

Start with Benzinga’s review to protect your business with the right brewery insurance.

Best Brewery Insurance

Begin your search for the best brewery insurance by comparing customized quotes from trusted providers. Choose the coverage types you’ll need, compare rates and compare coverage features.

Types of Brewery Insurance

Growth in the brewery industry has led to insurance packages tailored to the needs of breweries. There are options to adjust many coverage limits or customize coverage for additional risks. 

An insurance package is a group of 2 or more policies designed to work together and tailored to address an industry or market segment. Below you’ll find some key coverages, as well as insurance types to consider based on your business structure.

General Liability Insurance

Commercial general liability (CGL) insurance focuses its protection on financial risks created by your business itself. These risks range from slip-and-fall accidents (bodily injury) to personal injury and advertising injury (reputational harm) to damage to the property of others. 

Most small business general liability policies provide a base coverage limit of $1 million per occurrence, but you can choose a larger coverage limit to better protect your brewery business.

CGL coverage protects against more common risks but can overlook risks specific to certain industries. For example, breweries might consider the following additional coverage types:

  • Liquor liability
  • Pollution liability

You may be able to add these to your policy by using an endorsement (language that changes your coverage).

Commercial Property Insurance

Commercial property insurance policy can help protect your business investment whether you rent or own. Your policy protects assets owned by your business including the building itself (if you own) and improvements you’ve made to the space (if you own or lease). 

A commercial property insurance policy can also protect your equipment, supplies,and inventory against covered risks like fire, vandalism, theft, several types of water damage and more.

Additional policy endorsements can cover equipment specific to breweries like:

  • Tank collapse
  • Tank leakage
  • Restaurant equipment

Business Owners’ Policy (BOP)

A business owners’ policy (BOP) combines the liability protection of  a CGL policy with commercial property insurance. A BOP becomes 1 policy that can be customized with additional coverage specific to your business. You can also adjust coverage limits for many coverage types.

Business Income Coverage

Insurance shows its real value when you have a claim, but claims can also result in lost income. Fortunately, many policies allow you to choose a coverage amount for lost income if you have a covered business property claim. 

If a covered claim forces you to close your brewery temporarily while your business location is being repaired, you’ll have a way to cover ongoing expenses like payroll, rent, utilities and other business expenses.

Commercial Auto Insurance

If your brewery business owns vehicles or you use personal vehicles for business, you’ll need the right auto coverage to keep your business protected. Commercial auto insurance typically provides higher liability limits than a personal policy and extends coverage to business use, such as delivering products. If using a personal vehicle for business, reach out to your insurer to discuss coverage options. A standard personal auto policy won’t cover business-related risks.

Inland Marine Insurance

Inland marine covers products in transit (on land). For breweries that deliver beer or even wholesale supplies, this coverage can protect valuable inventory while it's on the move.

Workers’ Comp Coverage

Most states require workers’ compensation coverage for businesses that have employees. This no-fault coverage provides a fixed compensation structure for workers injured on the job. Workers’ comp also shields your business against several types of injury-related lawsuits.

Employment Practices Liability Coverage

Hiring and managing employees comes with liability risk. Employment practices liability insurance (EPLI) helps safeguard your business against potentially costly losses due to harassment, discrimination, breach of contract and other work-related concerns.

Cyber Liability Insurance

Whether you have a digital storefront or utilize a database to track your business, electronic customer data can be at risk. Cyber liability insurance can help cover costs associated with a data breach or cost to individuals or other businesses if someone at your business inadvertently transmits a computer virus.

Umbrella Policy / Excess Liability Insurance

An umbrella policy or an excess liability insurance policy extends the liability insurance limits for underlying policies. For example, a $1 million umbrella policy or excess liability policy can double the base ($1 million) coverage on your CGL and commercial auto policies. 

Umbrella policies can add new coverages as well, whereas excess liability policies simply increase coverage limits for underlying policies.

Additional Insurance Types

Your brewery business may also need additional coverage types. Consider the following coverages when building your customized brewery insurance package:

  • Event coverage
  • Equipment breakdown coverage
  • Beer contamination or spoilage
  • Product withdrawal (recall) coverage

If you’re brewing at home, be aware that home insurance policies don’t cover business-related risks. Fortunately, basic business liability coverage rates are based on top-line revenue, making this essential coverage more affordable for start-up brewery businesses.

Cost of Brewery Insurance

Insurers weigh a wide range of factors when setting insurance rates. Insurance is the transfer of risk, but insurance rates attempt to price that risk accurately. 

Claims history can play a big role in rates as can the amount of experience you have in your business. Coverage limits affect business insurance rates as well, but you’ll often find that higher coverage limits result in a lower cost of insurance per dollar of coverage. 

By choosing more types of coverage, you can protect your business in more ways. However, you’ll also pay more for your coverage overall. Bundling refers to purchasing more than 1 type of coverage from the same insurer and often offers a way to earn discounts to reduce the overall cost of insurance.

Insurers evaluate hundreds or even thousands of data points when setting insurance rates, which means your rates can vary from those of other businesses in your industry. Average costs can be useful for planning, however. Insurance rates for breweries are often similar to those for restaurants because many of the risks are also similar. 

Below are sample rates for several common insurance types.

Policy typeAnnual costCoverage limit
General liability$800$1,000,000
Business owners’ policy$2,100$1,000,000 liability
Workers’ comp$1,500Varies
Liquor liability$550$1,000,000

Insurance rates are also affected by the size of your business. Premiums for general liability insurance, for example, increase as your business grows sales. Workers’ comp insurance costs vary based on payroll rather than sales. A premium refers to the amount you pay monthly or annually for your insurance coverage.

How Brewery Insurance Works

Although industry-specific insurance packages are becoming more popular, brewery insurance isn’t a fixed type of insurance. Instead, brewery insurance is made of several policies to address several types of risk. 

Many small breweries start with a business owners’ policy — a policy that combines general liability insurance with business property coverage and add other policies or options as needed. 

As an example, general liability policies typically exclude coverage for liquor liability if the business manufactures, distributes, sells or serves alcoholic beverages. Breweries need to add this coverage with a separate policy or with an endorsement that removes the exclusion.

There may be other types of coverage you’ll need as well. But the good news is that you can often earn discounts by bundling coverage with a single insurer or by buying a customizable insurance package.

Per federal requirements, brewers also need surety bonding to begin brewing. You can start your search with the U.S. Treasury list of certified companies.

Choose the Best Brewery Insurance

When you started your brewery, you gave careful consideration to your product, your manufacturing method, location, business structure, and anything else that could affect the success of your business. When choosing the best brewery insurance, give the decision the same importance and weigh your options carefully. 

Compare quotes from several insurers, evaluating not just price but also policy features. With the right coverage in place, you can focus your energy on doing what your brewery does best: making great beer.