All businesses need insurance, and a brewery is no exception. In Massachusetts, homeowner’s insurance policies may offer limited coverage if you’re just a homebrewer, but if you sell beer it isn’t sufficient.
Here are the most common insurance forms recommended for restaurants and breweries.
Commercial General Liability Policy
A commercial general liability policy protects you from the costs associated with a lawsuit for physical injury or property damage. It pays for a defense, settlement, and court fees. You may need additional coverage if your brewery conducts tours or offers tastings.
Commercial Property Insurance
Commercial property insurance is a must-have as it protects your premises against covered risks such as fire, vandalism, theft, etc. However, it does not cover flooding unless it is from an unexpected event like a burst pipe. Flash floods and sewer backups require additional coverage.
Equipment & Supplies Coverage
If the brewing vat in your operation breaks down, you’re basically out of business. The same goes for a restaurant if their grill quits. You can buy coverage for this equipment at its actual or replacement value.
Business Interruption Insurance
Business interruption insurance compensates you for lost income when your brewery or restaurant can’t earn income due to a covered loss. It provides a cushion so you can pay overhead and wages, until things get back to normal.
Product Liability Coverage
Any business with a retail aspect to their operation is subject to this risk. If a meal or drink you serve to a customer leads to a customer claim of illness, or even death, you’ll carry the financial burden. Even if it’s an unfounded claim, you’ll still pay legal fees unless you have product liability coverage.
You’ve just finished a special batch of brew and the power goes out. There’s no heat for fermentation and you can’t get an electrician straightaway. The mixture spoils and you must flush away all your valuable raw materials.
You just received your weekly shipment of food for your restaurant and the cooler dies. The repairperson can’t get a part for a couple of days and hundreds of dollars worth of meat and produce spoil.
If you have inventory insurance, you’re compensated for your loss so you can resume operations as soon as possible and minimize financial loss.
Liquor Liability Insurance
Manufacturing, distributing, selling, and serving alcohol comes with unique risks. If you sell or serve alcohol to an intoxicated person and they injure someone or cause property damage, you’re liable under Massachusetts’ Dram Shop Law. Without liquor liability coverage, you’re responsible for lawyer fees, settlements, and medical bills.
Workers’ Compensation Coverage
All employers in Massachusetts are required by state law to carry workers’ compensation insurance for their employees. It pays for medical treatments and partially compensates employees for lost wages if they’re injured.
Commercial Auto Insurance
Personal auto insurance coverage may offer limited protection if you use your own vehicle for business purposes, but it often does not cover you at all. You need commercial auto insurance for you and your employees for protection when using a vehicle for business purposes.
Tailor Your Coverage
Since the needs of brewers and restauranteurs vary, always discuss coverage with your local independent insurance agent. They understand exclusions and limitations, local and state regulations, and insurance jargon. A standard insurance policy does not serve you well and you may pay for coverage you don’t need.
Let your agent tailor your coverage specifically for your business so you don’t pay more than necessary, and you’re adequately protected against all risks.