The boom in the craft brewing industry has spawned not only more selection at the tap, but more selection in insurance policies. A number of insurers have developed programs specifically tailored to craft breweries, a review of recent rate filings shows.
The rise in craft breweries is by now no secret, but figures from the Brewers Association help illustrate the robust growth. The number of craft breweries grew by 14.9% in 2015, according to the industry trade group, on the back of a 28.4% increase in 2014, and a 19.2% jump in 2013.
Auto-Owners Insurance Co. is one of the recent examples of an insurer that has modified its policies for craft breweries. It offers an optional package that provides specific coverage and limits for risks, such as changes in temperature or humidity, the collapse of tanks, and craft brew contamination. Continental Western Insurance Co. is another. In an Idaho filing, it includes a specific craft brewery property enhancement endorsement, which adds coverage for, among other things, the contamination of beer stock, the replacement of a key employee, and beer stock leakage or spillage. Continental Western is an Iowa-based unit of W. R. Berkley Corp.
These are but a few of the more recent examples, and other insurers not featured in the above chart have undoubtedly developed craft brewery programs. This analysis is meant only to provide insight into how some insurers have tackled the risk, based on product filings approved of late, rather than a comprehensive overview of the insurers in the market.
Another trend in the industry is the rise of brewpubs, or breweries with a restaurant operation. According to the Brewers Association, the number of brewpubs in the U.S. grew 10% in 2015, a development that Allied World Assurance Co. (U.S.) Inc., for instance, has sought to address. While the Allied World Assurance Co. Holdings AG unit already has a package program aimed at breweries, known as BrewPlus, it filed in April to enhance the rates offered under that program to cover brewpubs.In addition to breweries, insurers appear to have their eyes on other alcoholic beverage startups. Donegal Mutual Insurance Co., for example, has developed an application that covers a variety of facilities, including distilleries. The application, which will be used with commercial property and commercial general liability programs, can be found in form filings submitted to North Carolina and Wisconsin regulators. It includes a series of questions, including how much the brewery or distillery produces, the number of servers and bartenders, and the types of equipment used. There are also questions specific to distilleries, such as whether explosion-proof lighting is used and whether the distilling area is separated from the rest of the facility.