Running a craft brewery, distillery, or taproom is not like running a typical business.
You may be manufacturing your own product in the back, serving customers in the front, hosting live music on the weekend, renting out space for private parties, and distributing your products to restaurants, bars, or stores throughout the Great Lakes states.
That is a lot happening under one roof.
And from an insurance perspective, it means your business may have several different types of risk at the same time.
At Shurr Insurance Agency, we believe the best way to approach brewery, distillery, and taproom insurance is to look at the entire operation, not just the building or the bar.
What happens if a tank fails and ruins a batch?
What if a refrigeration system goes down?
What if a customer is injured after being served alcohol?
What happens if one of your products needs to be pulled from store shelves?
These are the types of questions craft beverage businesses should be thinking about.
Here are some of the biggest insurance considerations for breweries, distilleries, and taprooms in Indiana and the surrounding areas.
1. What Happens When a Tank Fails or a Batch Is Ruined?
For a brewery or distillery, the product itself represents a significant investment.
There is the cost of ingredients, production time, labor, storage, and the potential revenue you expected to make once that product was ready to sell.
Now imagine an issue happens during production.
A tank malfunctions.
A batch is contaminated.
A refrigeration issue affects the product.
Or equipment fails and thousands of dollars' worth of product is lost.
For a craft beverage business, that type of loss can have a much bigger impact than simply replacing a piece of equipment.
You may also be losing:
Depending on the cause of the loss and the insurance coverage you have in place, not every situation may be covered.
That is why brewery and distillery owners should have a conversation about risks involving tank leakage, contamination, spoilage, and product loss.
The important thing is understanding what your policy actually covers before you are standing in front of a failed tank or looking at an entire batch that can no longer be sold.
2. Liquor Liability Is More Than Just Serving Drinks
If you operate a taproom, bar, brewery, or distillery where alcohol is served, liquor liability should be an important part of your insurance conversation.
Serving alcohol creates a different type of exposure than a typical retail or manufacturing business.
This can become even more complicated when your business hosts:
If someone leaves your establishment after consuming alcohol and causes an accident or injury, your business could potentially face a claim depending on the circumstances.
Indiana has specific laws and legal standards involving alcohol-related liability, and every situation can be different.
That is why it is important not to assume that a standard general liability policy automatically provides all the protection your business needs for alcohol-related claims.
A taproom's insurance program should take into account how alcohol is sold and served, the size of the operation, the events hosted, and the overall exposure of the business.
For businesses serving craft beer, spirits, or other alcoholic beverages, liquor liability coverage is something worth reviewing with an experienced insurance professional.
3. Your Specialized Equipment Is a Major Part of Your Business
A brewery or distillery can have a significant amount of money invested in equipment.
Depending on your operation, that may include:
When one of these systems goes down, the cost may go beyond repairing or replacing the equipment.
A breakdown could potentially stop production, spoil inventory, delay orders, and impact your ability to serve customers.
That is where equipment breakdown coverage may be important to discuss.
Standard property coverage and equipment breakdown coverage can respond differently depending on the cause of the loss. Normal wear and tear, maintenance issues, and other exclusions may also apply.
The key is understanding where one type of coverage ends and another may be needed.
For a business that depends on specialized equipment every day, waiting until something breaks to review the policy can be an expensive lesson.
4. What Happens If Your Product Is Already Off the Premises?
Many craft breweries and distilleries do more than sell directly to customers in their taproom.
Your products may also be distributed to:
Once your product leaves your facility, your exposure does not necessarily disappear.
Imagine discovering that a batch has a potential safety issue, contamination concern, labeling problem, or another issue that requires you to remove the product from distribution.
A product recall can create expenses that go beyond the value of the product itself.
Depending on the situation, costs may involve:
Not every commercial insurance policy automatically includes product recall coverage.
If your brewery, distillery, or beverage business distributes products beyond your own location, it is worth discussing product liability and product recall exposures with your insurance agent.
5. A Brewery Can Be a Manufacturer, Bar, Restaurant and Event Venue All at Once
One of the biggest challenges with insuring a craft brewery or taproom is that your business may not fit neatly into one category.
You might be:
Manufacturing a product.
Serving customers alcohol.
Selling food.
Hosting live entertainment.
Renting space for private events.
Distributing products to other businesses.
Each part of the operation can create its own insurance considerations.
For example, if you regularly host private parties or live music, you may have additional concerns involving crowd size, premises liability, contracts, and event-related risks.
If you manufacture and distribute products, you may need to consider risks that a traditional bar would never face.
That is why simply purchasing a generic "bar insurance" policy may not fully address the way your business operates.
What Insurance Should a Craft Brewery, Distillery or Taproom Consider?
Every business is different, but depending on your operation, an insurance program may include coverage such as:
The right insurance package depends on the size of your business, what you produce, where your products are sold, whether you serve alcohol on-site, and the additional activities happening at your location.
Don't Wait for a Loss to Find Out Where the Gaps Are
A lot can happen between the time ingredients arrive at your business and the time a customer takes home a finished product.
Your product has to be manufactured, stored, transported, sold, and in many cases served directly to customers.
At every stage, there may be risks that deserve a closer look.
At Shurr Insurance Agency, we work with businesses throughout Northwest Indiana and the surrounding areas to help them better understand their insurance options and identify potential coverage gaps.
We believe the conversation should start with understanding your actual business.
Do you manufacture your own products?
Do you serve alcohol on-site?
Do you host events or private parties?
Do you distribute products to other locations?
How much specialized equipment does your operation rely on?
The answers to those questions can make a major difference when building an insurance program.
Serving Craft Beverages in Indiana and Surrounding States Comes With Unique Risks
Whether you operate a small craft taproom, a growing brewery, a distillery, or a business that combines manufacturing and hospitality, your insurance should be built around the way you actually operate.
At Shurr Insurance Agency, we can help you review your current coverage and identify potential gaps involving your property, equipment, products, employees, alcohol service, and events.
Let Shurr Insurance Build an Insurance Package Around Your Business
Serving craft beverages in Indiana comes with unique risks. Your insurance should reflect that.
If you own a brewery, distillery, taproom, or other craft beverage business in Indiana or the surrounding areas, contact Shurr Insurance Agency to discuss your current insurance coverage.
Let our team help you build an insurance package designed around your business and the risks that come with it.
This article is intended for general informational purposes only and does not constitute legal or insurance advice. Insurance coverage, availability, limits, exclusions, endorsements, and eligibility vary by policy and carrier. Indiana laws and liability standards can also change or depend on the specific facts of a situation. Please speak with a licensed insurance professional and, when appropriate, a qualified legal professional regarding your specific circumstances.