Tips & Best Practices for Craft Beer and Spirit Producers
By: David DeLorenzo
Beer and spirit development is something of an art. The masterminds behind these crafts must have keen awareness and attention to detail to ensure the best result, from flavor to body.
However, if they own and operate the establishments that serve their specialty sips, they must also be masters of entrepreneurship. This often includes leading and managing staff, handling payroll and ensuring the company’s insurance properly protects the business, its staff and patrons.
As beer and spirit producers are experts in their craft, I am an expert in hospitality insurance, specifically for bars, restaurants, tasting rooms, brewpubs and other establishments that serve food and alcohol. This niche market has unique, intricate circumstances, so business owners need to understand the ins and outs of insurance.
Craft beer and spirit producers don’t have to get an entire education on the topic, but being informed enough to find the right broker to guide them will make a difference. From the perspective of a 20-plus-year veteran insurance broker who carved out a niche just for this set of businesses, here are some tips and best practices to succeed in this market.
One Small Lease for a Business, One Giant Leap Toward Fulfilling a Dream
In many cases, a business starts with one inkling of a dream. Soon after, a lease will likely be required to make this dream a reality. The importance of the establishment’s location cannot be understated when transforming the mirage into a tangible reality. Second to the foundation of the dream is the lease that will define the leasee’s responsibilities and entitlements. Insurance on the lease is pivotal in that it can serve to safeguard the investment of your dream.
Most leases have their own set of insurance requirements that can help set the stage for the success of a business. Paying close attention to the foundational aspects of the lease, as detailed next, can help ensure best practices and a solid foundation for the future of the business.
Assessing, Addressing and Avoiding Risks
Having been in the hospitality industry for well over 20 years now as both a restaurant owner and an insurance broker, I have seen and experienced a lot of unique situations from different perspectives. So, when I say that understanding risks and exposures is a crucial factor of success, it’s coming from a place of lessons learned and knowledge gained. With that, here are some of the most beneficial ways to assess, address and avoid risks as a business owner in the hospitality industry.
Serving liquor can bring joy and perils to a business owner who makes and serves wine, beer or spirits. While a clever cocktail menu enhances many establishments’ vibrant energy, every pour possesses potential risk, as overconsumption of alcohol often brings the consequences of poor decisions from fights to driving under the influence. Having insurance for liquor liability is a non-negotiable in protecting your establishment from lawsuits with allegations of negligence or overserving. Know the laws in your state and ensure your business is appropriately protected.
Also vital to an establishment selling craft beer or spirits is proper assault and battery coverage. Similar to liquor liabilities, assault and battery instances are often a result of overconsumption. To this end, you must be careful when safeguarding your establishment.
Consider General Liability the frontline of defense for your business. It will protect you when accidents happen on your property. This coverage could prevent a patron tripping over a loose tile at your establishment from becoming a lawsuit. While the occurrence and aggregate limits of insurance companies can seem overwhelming, understanding them is vital as they are the backbone of your safety net.
Your establishment’s success largely depends on your staff, from the kitchen team to the faces that are seating and serving your guests. A solid employee base is essential; protecting those employees is even more important. Owners also need to protect their establishment from claims arising from hiring disputes to allegations of discrimination. This is why Employment Practices Liability Insurance (EPLI) is key. Hired and Non-Owned Auto is another important level of coverage for anything from sending an employee on an errand to making deliveries.
Cyber Insurance is paramount for protecting a wine bar or taproom and its customer data in today’s digital world. Umbrella Insurance can be likened to the roof over your establishment. This coverage extends beyond the existing policy limits and offers additional protection. Not all umbrella policies are the same, so it’s essential to understand the terms, coverage, and exclusions.
Ultimately, when it comes to coverage, it’s not just about more; it’s about the right coverage for your specific establishment. This is especially true in the case of a bar or restaurant that is serving wine, beer and spirits.
Brokers vs. Insurance Companies: Know the Difference
Just as coverage is not created equal, not all help is the same. Business owners must know who to turn to and when. Quite simply, a broker is more than just a middleman. A broker will advocate for your business and help guide you through the complex world of insurance. A good broker will understand your needs and help you find the right fit for your establishment. Insurance companies are the policy creators and the ones who bear the risk.
I cannot overstate the importance of working with a specialized broker who knows the intricate ins and outs of the craft wine, beer and spirits industry. They can become your partner in finding the best insurance for your business and throughout your journey as a business owner.
Prove It: The Value of the Paper Trail
Documentation and certification are paramount. You need coverage, yes. But more importantly, you must be able to prove you have it when the time comes. While paperwork may seem daunting, it’s yet another line of defense in the protection of your business.
Whether you dream of opening a wine bar or are already immersed in the hustle and bustle of a thriving taproom, there’s never a wrong time to ensure your insurance and policies are airtight. With these tips and best practices, you can rest easy that your business is protected so you can focus on your craft.
Finding the right partners to help take your dream to the next level or to help you continue to thrive is at the forefront of your success. Through trust, communication and camaraderie, a long-term partnership with your specialized broker can serve as an important relationship to propel your business.
Out of his passion for serving the restaurant and hospitality industry, David DeLorenzo created the Bar and Restaurant Insurance niche division of his father’s company, The Ambassador Group, which he purchased in 2009. For more than 20 years, he has been dedicated to helping protect and connect the hospitality industry in Arizona.
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