Winery Insurance – What Kind and at What Cost

Whenever you budget the expenses of your business, winery insurance must be high on the list because you can’t always know exactly what can happen in the future.

With the protection provided by general insurance and all the other kinds of insurance we will tell you about, you can protect your business and yourself in case something unwanted happens.

Like any business owner, for your winery enterprise, you must consider how much financial risk you are taking on.

If your winery business runs without proper insurance, you are taking a tremendous chance not just of losing some money but of a final wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the upshots of their actions. 

In this article, we are giving very general guidelines for startup businesses to explain what the main kinds of insurance that you need are, and where possible, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your winery business?

What this means, for any winery business owner, is that if some company claims that your business caused them some physical or economic damage, a court can award damages far beyond the total size of your business.

Your winery business is not protected by laws in the same way as states are, where edicts can place a “cap” on the maximum level of liability.

In some states, like Texas, there are specific monetary levels that limit the amount an adjudicator can award in any case against the state.

In a court case, it’s purely the duty of the jury to award whatever amount they deem appropriate, even sometimes giving a plaintiff more than they have claimed.

When you are running your winery operations, you can’t deny responsibility for the results of your actions.

Even more importantly, unless you have spent in advance the money necessary to have your business running as an LLC, all of that liability belongs to you alone.

What does winery insurance protect you from?

For your winery business, the most important sorts of insurance are designed to cover the risks to your business from accidents, from unexpected events, and from mistakes.

As well there are some official kinds of insurance that various states require.

In the next few paragraphs, we will outline the most important points any winery business owner should consider when negotiating the insurance needed.

The main headings of insurance for your winery businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any winery business is dealing directly with customers, and that means you always have the danger that some accident can happen to them bodily or else something of theirs can be ruined.

In such a case, they can sue you for compensation.

General liability insurance policy for your winery business insures you against claims coming from injury to clients or damage to their property.

It protects your winery business from the claims themselves and also to any resulting court costs and legal fees of the lawsuits.

In many cases, it should help you to qualify for extra business from city and state organizations, where contracts insist on proper liability insurance.

The average level of general liability insurance for your winery business would be with a cap of $1 million for a single submission and a total of $2 million for the whole year.

See the table in the costing section below for average prices of general liability insurance for your winery insurance operations.

Professional liability insurance for your winery business

In the event where a client alleges some negligence, errors, or omissions in how you conducted your winery business for them, you can quickly face a monetary claim.

Even if the case against you is ruled in your favor, the cost of defense can be high, and the impact on your reputation can be damaging.

Every small winery business should have enough professional liability insurance to cover a once-off claim of $25,000, with annual cover of $50,000.

See the table in the cost of winery insurance section below for average prices of professional liability insurance for your winery operations.

Product liability insurance

Whatever goods you sell or advice you give about the goods, you are running a risk that buyers may claim that what they received didn’t meet your description of function, or that your advice was basically incorrect.

You need to be aware of the particular laws of product liability in your own state.

For example, in California, all businesses in the supply chain can be held liable for results caused by products claimed to be defective.

To cover yourself against any possible lawsuit, you need Product liability insurance for winery

Only you can determine exactly how much insurance you must have.

Best advice is to talk to experienced insurance agents, brokers or company representatives for help.

Commercial insurance

Commercial vehicle insurance for your winery business

Take care! – practically all policies for private vehicle insurance do not cover any occurrence like theft or accidental damage when the van is being used for business purposes.

The right way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a designated commercial vehicle insurance package.

Commercial truck policies cover the value of any vehicle in case of accident, malicious damage, fire, or theft.

In addition, in case of any accident, the truck itself, the content and any legal bills, medical expenses, and property damage is guaranteed if your truck is involved in a collision.

Most states, other than Virginia and New Hampshire, require this type of insurance.

The necessary value of the insurance is worked-out for the depreciated value of the vehicle, and your requested level of cover of contents. 

Tools and Equipment insurance

Since your winery business needs unique and costly equipment, you can appreciate how much it can cost to replace it in case of any damage, loss, or theft.

The equipment may be subject to malicious damage, deliberate fire, theft, other such unexpected acts.

In addition, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can eliminate your whole business in one stroke.

Unless you can afford to immediately replace such specific gear quickly out of your own pocket, you must have full-level equipment insurance so that you can immediately buy everything needed to keep your winery business running.

It is difficult to advise how much equipment insurance you need – it’s basically dependent on how much you have invested in your winery business’ equipment.

Commercial Property insurance

Any winery business that owns or rents space in a building needs a commercial property insurance policy.

If you own the space, you certainly have a substantial capital investment, as well as a big liability if there’s a mortgage.

Your physical building location must carry insurance coverage for the value of the premises and contents against natural occurrences like fire and storms, and against deliberate damages like theft and vandalism.

If your winery business deals in areas of high risk, like California or North Carolina, additional coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Rhode Island, where extreme cold snaps can cause damage to outer coverings of winery business premises, there is a need for more additional cover than in warmer climes.

Whereas the level of cover depends completely on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of winery insurance section below to give some idea of the average prices per million dollars of property insurance for your winery business.

Temporary insurance by month, week or day for your winery business

Is your winery business working part-time or casually, or is the level of business variable?

Using short-term insurance makes perfect sense. Business insurance by the month, day, or week – temporary insurance for winery – are special policies where you can cover a specific period when you want to be covered.

By only paying for that period of cover, you will save by having lower premiums but still having identical risk cover.

The essential feature of short-term insurance is that you purchase the cover for a defined period – a nominated date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.

When you are expecting periods of larger business activity, get the existing cover increased.

Talk to your insurance agent, broker or the company’s representatives to see what options you have.

Business Owners Policy BOP for your winery business

You have the option to combine several of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.

A BOP combines commercial property and public liability insurance by packaging these coverages into one insurance policy, which can save you money.

BOP insurance will cover you if any claims of injury or property damage are made.

It is often the right choice for small and medium-sized winery businesses, such as yours.

There are two limits that will rule whether BOP is suitable for your own business.

BOPs will not cover your professional liability or commercial vehicle risks.

Also, the size of your business will determine whether you are allowed to take out BOP cover.

The usual business that is allowed to take a BOP policy must have no more than one hundred employees, and under five million dollars in annual revenue.

Plus, you must separately take out the mandated worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your winery business employees

In many states, it is mandatory to have workers compensation insurance when your winery business has one or more employees.

Workers compensation insurance covers the operation against any costs that arise if an employee experiences an injury or becomes sick as a result of work.

The benefits include medical expenses, death benefits, lost wages, and vocational rehabilitation.

Failure to meet a state’s requirements in this regard can leave you as the employer obliged to pay penalties levied by the states.

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only authorize coverage from the government-run monopoly state funds.

In these states, you cannot obtain your workers compensation obligations from private insurance companies.

Workers compensation charges are worked out based on the employee’s pay, and usually come out at around $1.00 per $100 per month.

However, you must consult the relevant authorities in your state.

Average costs of these types of insurance

Although every winery insurance requirement is unique, there are enough examples of standard quotes from insurance companies for us to give rough guidelines, including what are the cheapest rates offered.

Of course, you should always check with an agent what’s relevant for your business.

The list below is of annual premiums we have researched for the main types of insurance your winery businesses needs.

Cost of insurance for your winery operations depends on many different factors.

We have estimated these figures for small independent winery businesses.

In larger states like California, premiums are generally about 20%-30% higher than national averages, but in smaller states like Utah, they will be about 20%-30% lower.

The location and size and type of your winery business can have a big effect on the cost of different policies.

You should talk to professional insurance agents and brokers, or insurance company representatives.

In addition you can let the internet do the work for you by looking for insurance companies near where your business is located.

Another useful source of information is the local Better Business Bureau in your city.

FAQ

What is small business insurance for winery operations?

This is a wide term used to describe standard insurance policies designed to protect winery business owners from risks like bodily injury, property damage, claims of negligence.

Does my winery business have to have insurance?

Some of the forms of insurance are not mandatory for you to operate your business, but they can protect you from risks in your business operations.

Certain other forms are required by state law, such as workers compensation and vehicle insurance.

What does a small winery business insurance policy cover?

Liability insurance provides coverage against lawsuits or claims filed by a customer for bodily injury, property damage, or negligence.

The precise cover will vary based on your own operations.

See the table in the costing section above for average prices of the most common policies for winery insurance.

How much will winery business insurance cost?

On top of the size of the business, some other factors, such as location and claims history, are used to determine your policy’s cost.

You should discuss with professional insurance agents and brokers, or insurance company representatives.

You can search for more information insurance for winery, in the search box below, and follow the relevant links.