Microbrewery Business Insurance
Getting insurance for your microbrewery business is essential.
Microbrewery businesses need to be protected against things like claims of breach of contract, product liability, and employment-related disputes.
For example, your microbrewery accidentally sells a contaminated beer to a customer, or a supplier claims you didn’t pay the full amount by the due date.
We’ll help you find the most personalized and affordable coverage for your unique business.
Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.
Best Insurance for a Microbrewery Business
General liability insurance is — generally speaking — one of the most important insurance policies for microbrewery businesses.
Some of the risks general liability insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
Due to the range of risks a microbrewery business faces, many decide to invest in some of the following additional policies:
- Workers’ compensation insurance: Provides financial support to any of your workers who are unable to work due to an injury or illness they sustained while performing a work activity.
- Product liability insurance: Covers your legal defense fees and any potential awarded damages if your business is sued for some harm one of your drinks has caused a customer.
- Commercial property insurance: A lot of expensive equipment is required in order to run a microbrewery. This policy covers any replacement costs if any business property was destroyed or damaged in a covered event.
There are two principal types of insurance providers available to you when looking for coverage for your microbrewery business:
- Traditional brick-and-mortar insurers
- Online insurers
We typically encourage small businesses to consider online insurers like Tivly or Next as, despite being relatively unheard of, they offer an excellent, affordable way of accessing high-quality, personalized insurance.
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Cost of General Liability Insurance
The average microbrewery in America spends between $500-$1,200 per year for $1 million in general liability coverage.
Compare the average cost of general liability insurance for a microbrewery business to other professional industries using the graph below.
Several factors will determine the price of your policy. These include your:
- Location
- Deductible
- Number of employees
- Per-occurrence limit
- General aggregate limit
You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy.
A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.
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Common Situations That General Liability Insurance May Cover for a Microbrewery Business
Example 1: You are taking a group on a tour of your brewery when one person wanders off. She slips and falls, breaking her hip. She demands that your business pays for her medical treatment. The general liability insurance policy that you carry will likely cover this expense.
Example 2: A competing brewery is upset with your new marketing campaign, claiming that your business has libeled them. They file a lawsuit against your company. Your general liability insurance will cover the cost of your legal fees and any potential settlement costs.
Example 3: One of your employees is bringing a stack of bottles up to the front when he accidentally knocks over a customer. The man falls backward, hitting his head on the floor and sustaining a concussion. He files a lawsuit against your business. The general liability insurance policy you have will pay for your legal defense, including the cost of a settlement if one is necessary.
Other Types of Coverage Microbrewery Businesses Need
While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some of the most common types of coverage:
Workers’ Compensation Insurance
Most states require businesses that have employees to carry workers’ compensation insurance. If an employee is injured performing work-related activities, your policy will pay for their medical treatment. It will also cover some of the lost wages for the employee if they are unable to work while recovering.
Product Liability Insurance
You strive to ensure that your customers enjoy your products responsibly, but you cannot be certain that they will do so. Product liability insurance is designed to protect your business from liability caused by your products. For example, if a customer claims that your beer caused him or her injury or illness and files a lawsuit, your policy will pay for your legal defense fees. It will also pay for a settlement if one is required.
Commercial Property Insurance
The equipment and supplies you have accumulated to operate your microbrewery were expensive, and they would be costly to replace if you were to lose them in an unexpected event like a fire. But if you have commercial property insurance, you can file a claim with your insurer and get financial help with replacement costs as long as your loss was caused by a covered event.
Commercial Umbrella Insurance
An umbrella policy is designed to protect your business when your general liability insurance limits are exceeded—like if you lose a major lawsuit. If the limits of your general liability insurance are exceeded, the umbrella policy will kick in and pay until its limits are reached. That way, you can avoid having to pay the remaining damages out of pocket.
Additional Steps To Protect Your Business
Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.
Here are several things you can do to better protect your microbrewery business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
- Stay up to date with business licensing.
- Maintain your corporate veil.
Microbrewery Business Insurance FAQ
Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.
A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.
"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.
Yes. Although not initially apparent, business insurance will be essential from the first day of your microbrewery business due to how prone to risk it is.
Keep in mind that it will also most likely be mandated to obtain specific insurance policies in order to be legally compliant, such as workers’ compensation insurance.
Not necessarily. Certain exceptions may be written directly into your microbrewery business insurance policy, and some perils may be entirely uninsurable.
Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.
An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.