We’ve now looked at the Liability and Property risks a winery faces and what the proper insurance for covering them looks like. But there are a few more things to think about before calling it a day.
General Liability and Property insurance, with the special coverages mentioned in Part 1 & 2 of this series, cover the majority of a winery’s insurable physical risks, but there are a few more things that pose a threat to a winery’s well-being that I would be remiss if I didn’t mention.
What are these things?
Crop Insurance. Your Commercial Property insurance will often cover your trellises and vines from physical damage. It will even cover the grapes once they’re harvested and in storage or transit. But one thing property insurance will NOT cover is grapes that are still on the vine. Crop insurance will pay for loss to your grapes due to weather related risks, like fire, wildfire, earthquake, volcanic eruption, and even a failure or irrigation water due to unavoidable conditions. Crop insurance is a federally subsidized government program, which means the cost is minimal to you.
Pollution. General Liability insurance excludes damage to people and property that arises out of pollution. General Liability also does not cover damage to the environment. This is critical information for any winery that has a vineyard. How many things can happen that cold be considered “pollution”? How about overspraying pesticides? Spilling wine into the ground? Fuel or chemicals leaking from a tank, seeping into the ground and contaminating the ground water? What would it cost to clean up the pollutants, let alone pay for the damages it causes to someone else? Pollution coverage will help you with all these incidents and more. It’s hard to overstate the importance of pollution coverage.
Auto. We all know we need this. But sometimes there is a question about which type of policy should cover them. Do you need a personal auto policy or a commercial auto policy? There is not one right answer. This is going to depend on 1) the size of your vehicles, 2) the use of your vehicles, 3) the ownership of your vehicles, and 4) who drives your vehicles. Typically rates are lower on a personal auto policy, but typically, a winery uses its vehicles in ways that go beyond what a personal auto policy intends to cover.
If you have any employees, these two coverages should be on your list as must-have coverages:
Workers Comp – this is a legally required coverage if you have even only one part time seasonal employee. To know a little more about it, please go to Our Specialties Page.
Employment Practices Liability Insurance (EPLI) – This protects you from lawsuits from your own employees for things like wrongful termination, discrimination, and harassment. I’m not going to go into much detail here, but I wrote a blog about it, which you can check out here.
Finally, it is important to note that this is not an all-inclusive list because every winery is different. It all starts with General Liability and Commercial Property insurance, but there are many fine technical aspects to each individual winery that require many more coverages that are not mentioned here, such as Hired and Non-Owned Auto Liability, Employee Dishonesty, Employee Benefits, Ordinance or Law, Equipment Breakdown, Earthquake, Flood, and oh, this list goes on. This is where you want to have a discussion with a good agent that can help you out.
Now go get covered properly, Mr. or Mrs. Winery Owner! And good luck!