Risk Management for Craft Breweries: Insurance Coverage Options to Help Reduce Risks

Topics: Small Business

Whether you like to imbibe in a classic lager or a pilsner, a bold stout or a hoppy IPA, your options to enjoy craft beer today are seemingly endless. From local brewpubs to urban craft microbreweries, across the United States the craft brewery industry is booming. In fact, according to the Brewers Association, in the five-year span between 2012 and 2017, the total number of craft breweries in the country rose from 2,420 to 6,266. And the growth just steadily continues, with craft brewers clocking in at a 5% increase during the first half of 2018.

The Most Common Risks for Craft Breweries

risk management for craft breweries

Within every industry there are inherent risks that require special consideration to ensure the safety of both the employees and customers, and craft breweries are no exception. There’s not only liquor liability to think about, but safety hazards that could have a major financial impact on the brewery, especially for those smaller, local craft breweries.

According to data AmTrust collected, policies written for breweries have become increasingly popular within the past few years. The types of claims AmTrust sees for breweries are similar to those of the restaurant industry, with muscle strains from slips and falls and burns being the most common. However, breweries do have different exposures than restaurants. For instance, how are the vessels/vats cleaned? Are the employees responsible or is this subcontracted to a licensed contractor? If employees are responsible, there could be a confined space exposure which is not preferable.

Some of the most common risks and brewery insurance claims are often in regards to:
  • Faulty equipment. Breweries utilize a variety of different equipment to produce and store their beers, from the kegs to the walk-in coolers. In the event of equipment failure, for example, if the temperature gauge on the coolers malfunctions, this can easily lead to a spoiled batch of beer and money quite literally down the drain.
  • Problems with packaging. The bottles the beer is distributed in are often subject to certain issues, like breakage, chipping or even defective caps that lead to contaminated or moldy beer.
  • Unsafe working conditions. Brewery employees are often at risk for injuries due to slips and falls on wet floors or from tripping over items in their path. Burns from hot surfaces or steam emitted during the brewing process, plus dangers from chemicals are also common causes of injury.
  • Ergonomic hazards. It might not seem like an obvious risk, but brewery employees often engage in repetitive motions, lift heavy objects, or stand in awkward poses for extended periods of time, all which can lead to muscle strains and injury.

How to Manage Risk at Breweries

As the craft brewery industry continues to grow, so do the risks involved with running this type of small business. However, there are things breweries can do to help manage these risks, which help allow for less equipment downtime, improved products, increased employee safety and a variety of other financial benefits. A few risk management tips breweries should keep in mind include:

Having Proper Small Business Insurance Coverage

Due to the unique risks involved with running a craft brewery, it’s imperative to have the right small business insurance coverage to provide protection in the event of any type of disruption or claim. Craft brewery insurance policies generally include property, general liability, workers’ compensation and liquor liability.

Discussing Risk with Vendors and Suppliers

Quality control can make or break any small business. Craft breweries who utilize outside vendors for materials, equipment or cleaning tap lines should have a firm understanding of the responsibilities of each party in the event of any type of problem. Discuss the sharing of risks, go through negotiations and create a contract rather than simply do business with a handshake.

Creating a Checklist of Safety-Related Tasks

All employees should be fully trained on safety best practices and understand the risk involved with all operating procedures. Behind-the-scenes at a craft brewery often involved hectic schedules and lots of multitasking, and creating a designated checklist of tasks to work from helps keep everyone following the same procedures that ensure their safety.

Small Business Insurance Solutions from AmTrust Financial

AmTrust-appointed agents have the experience and knowledge your craft brewery needs to ensure its success. For more information about our small business insurance solutions, please contact us today.

This material is for informational purposes only and is not legal or business advice. Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose. Readers seeking resolution of specific questions should consult their business and/or legal advisors. Coverages may vary by location. Contact your local RSM for more information.

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