It’s not all bushy beards, tasting notes and bragging rights in the craft brewing space. The nature of the industry and how it operates commercially raises issues around safety in particular.
“Brewing is inherently hazardous,” says Brisbane Brewing Co. and Brisbane Brewhouse Operations Manager Mick White. “The chemicals involved, the frequency of the process, even the materials used in cleaning – boiling water, steam and caustic soda – mean production has to be rigorously managed and brewing staff have to know what they are doing.”
The problem with managing craft brewing risks, White says, mainly comes down to people. Both the craft breweries he runs are attached to hotels which, apart from supplying their own bars, also supply other buyers and often collaborate in business partnerships with other pubs and liquor retailers.
“You get staff from other establishments who don’t have the experience and aren’t covered by your business’s workers’ compensation. To add to the complexity they are sometimes sent to work with us on their days off.”
Claiming insurance if they injure themselves can be difficult.
Then there’s the clientele. Customers also present potential problems. “Fermentors are often accessible by the public, and children and drunk people are renowned for fiddling with things. Turn the wrong valve and 5000 litres of beer is on the floor, and if it’s under pressure there’s the added risk of possible injuries,” he says.
Range of risks
The scope of insurance required to properly cover all your operational exposures ranges from extended public liability – especially applicable if you participate in beer festivals or trade show events – to excise duty paid on unsaleable stock.
Having property insurance may be a prerequisite for obtaining finance for investing in plant and if your craft brewery grows its own ingredients it makes sense to have crop cover. Exposures at each step of the brewing process should be taken into account, such as
- machinery breakdown
- raw materials damage or loss
- stock contamination, spoilage, leakage or loss
- business interruption
- freight and transit
- product liability.
Standard insurance cover for fire or storm damage, burglary and workers’ compensation should also be included.
Complex process, single solution
“Craft beer brewing can be a complicated business,” says Gallagher wineries and brewing insurance expert Stephanie Fox. “There are can be contractual obligations that the business and general insurances don’t consider, such as being responsible for someone else’s beer which you are manufacturing on their behalf.
“What if there is an error in the formula or manufacturing process? What happens if you contaminate or lose that tank of beer due to an insured event? Will your current policy respond to all of your business activities?”
Many brewers have product stored at different locations, but it still needs to be covered under their insurance. Every business is different, Fox says, and there is no one size fits all product for these type of more complex risks.
“A broker can understand your risk and exposures and ensure you are aware of them all and where they can be mitigated.”
Click on the button below to find out more about how Gallagher can help protect your craft brewing business.