Contributed by Heidi Moore: Wineries and vineyards continually evolve to meet customers’ needs, make operations more cost-effective, and expand into new markets. But whenever businesses try something new, unexpected issues can also emerge.
Sometimes, costly mistakes happen, which is why wine companies of all kinds should prioritize risk management. With a little education and some savvy preparation, you can ensure your wine business is protected and will endure long into the future.
Emerging trends in the wine industry
One of the biggest shifts in the wine industry over the last few years has been changes in the kinds of vessels wine is stored in. Glass tends to be expensive, and the COVID-19 pandemic made it very hard to get. On top of this, cork can fail, resulting in cork taint.
For these reasons, many wineries are abandoning traditional bottles with corks and adopting alternatives like screw tops and plastic wine bottles. Some are even experimenting with canned wine and kegs of wine. In addition, some companies are utilizing new containers for fermentation.
Staying abreast of these trends is vital for wineries to stay competitive. Yet errors tend to increase when processes and procedures are new. Consequently, many kinds of problems can emerge as wine businesses experiment with new containers, closures, or procedures. Spoilage, leakage, and contamination of the wine are a few examples.
If processes aren’t followed correctly and the vessels aren’t sealed properly, the wine company can suffer costly mistakes and incur losses. The good news is that insurance can protect beverage companies from these threats.
How beverage insurance mitigates risk
Beverage insurance can include clauses that cover potential losses when wine companies transition to new kinds of carafes, closures, and processes. In this way, it’s an indispensable part of any winery or vineyard’s risk management strategy.
Beverage insurance can also protect wineries from many other possible threats. For instance, various parts of the country are prone to different types of natural disasters, such as tornadoes, earthquakes, or hurricanes.
Meanwhile, accidents can happen to anyone. A forklift can drop a barrel and break it, spilling wine onto the ground. If even just a small piece of metal strays into a vat of wine, every gallon could be ruined. A malfunctioning climate control system can lead whole rooms full of wine to be exposed to elevated temperatures.
Beverage insurance can also cover your winery’s tasting room and handle your legal fees in the event of litigation in some cases. Discover a printing error on your labels? Beverage insurance can also cover that. Blend the wrong two strains of wine? Again, beverage insurance can come to the rescue.
To be clear, not everything can be covered. But experienced agents with a background in beverage insurance in particular can customize a policy for your company that will protect you to the maximum extent from these types of issues and more.
Trust only agents who have experience in companies like yours
Buying a general beverage insurance policy is a mistake, since these often contain holes. Nothing is worse than believing your policy has you covered only to discover that it doesn’t when bad things happen and you need to file a claim.
Lots of people show me general policies from other carriers that only cover a minimal amount of their wine company’s possible leakage or spoilage, but these policies wouldn’t cover anywhere near the true value of their wine if they were to lose it. Inadequate policies like these can leave wineries on the hook for so much money, they might not be able to recover after an adverse event.
When choosing an insurance agent, ensure they have experience with companies like yours. The right insurance agent will not only have a thick portfolio of relevant experience to offer you, but also be able to explain what you have and don’t have in easy-to-understand language. Perhaps most importantly, they should ask you savvy questions to understand the scope and value of your specific business. Insurance should not be one-size-fits-all.
In my experience, it’s also important to find an insurance agent who is willing to conduct regular visits with you. Wineries and other beverage companies not only change their operations according to new industry trends, but also grow their businesses, revise their business models, purchase equipment, or move locations. Each change could raise new vulnerabilities their existing insurance policy might not cover.
When it comes to insurance, details are everything. These policies are legal documents, so the difference between one address and another can be the difference between getting a check from the insurance company to cover your damages and needing to reach into your own wallet. That’s why you should always cultivate your relationship with your insurance agent over time and chat with them as a routine part of your business’s evolution.
Be covered when it counts
Few people enjoy thinking about insurance, and even simple insurance policies for homes and automobiles can be intimidating. Commercial, farm, and small business insurance policies can quickly become even more overwhelming.
No one loves insurance — until you need it. To make sure you’re covered when it counts, build a partnership with a talented and experienced insurance agent who understands wine and can customize a policy to fit your exact needs.
ABOUT THE AUTHOR: Heidi Moore is a top insurance agent for Country Financial. The keys to her success have been prioritizing the client experience, educating customers about products and services, and giving back to her community. She offers a wide range of policies, from basics involving property/casualty to more complex matters involving retirement planning and distribution, which she partners with other Country Financial agents to implement. Being upfront and to the point, honestly helpful, and willing to go the extra mile have been extremely beneficial to the success of her office.