The Laird family, widely regarded as being the longest-running distillers in the United States, has been producing its legendary Applejack for over three hundred years.

Each generation has been a faithful steward of the business, enacting policies that allowed them to pass it on to the next.

Keeping a business running over timescales of centuries requires more than luck, though: it also needs planning.

Laird and Company’s leadership never ignores hazards to their financial viability.

Instead, bosses took the prudent approach and mitigated the risks they face with John B. Wright’s insurance products.

For us, working with a company with the longevity and prestige of Laird & Company is a privilege and an honor.

Our role is to provide the firm with the financial ballast it needs should it ever need to make a claim.

We would encourage other distilleries across the country to follow this survivor’s example.

Those in the sector should choose insurance that protects their enterprises for posterity, come hell, or high water.

Property Coverage

Distillery insurance isn’t a blanket product: Laird & Company benefits from a range of individual insurance types, each of which provides cover for various facets of their operation.
Property coverage is among the most important. Distilleries rely heavily on installed plant and equipment to facilitate their operations

If a fire, flooding, or malfunction puts a facility out of action, it can have long-term financial ramifications.

Sometimes these can be so severe that they force the company out of business.

Property coverage, therefore, is a safety net that distilleries can use to protect their hard, physical assets, and stock.

It covers things like the buildings the distillery owns, the contents of those buildings, including machinery, and all products in inventory.

It also includes miscellaneous items peculiar to distilleries such as corks, closures, bottles, caps, and labels.

Thus, it protects enterprises from anything that could harm their physical possessions or interrupt the flow of their operations.

For distilleries, getting property coverage from an insurer that understands the industry is vital.

The majority of insurance firms only pay companies “replacement value” – or how much an item of similar quality would cost to replace at current market prices.

If a fire destroys stock, the insurer coughs up the face value of the lost goods, allowing the affected company to recoup its losses.

For regular firms, this is fine. For distilleries, however, it is a problem.

They are different from most businesses because they produce appreciating products.

The longer liquor sits in the barrel, the more valuable it becomes. Standard insurers don’t recognize this.

If stock is lost, they replace it according to its “year zero” value – not the value that it accumulates as it matures.

Prudent managers, therefore, need to be careful in the insurer they choose.

It often pays to select a firm that has explicit insurance in the distillery industry and understands the needs of clients in the sector.

Going with a generic company could lead to unrecoverable losses.

You can immediately tell which insurers offer services explicitly to distilleries, and which don’t.

Veteran insurers know the specific issues that dog operators and provide terms in their contracts that cover these eventualities.

Take product leakage, for instance.

It is common for distilleries to experience a leak in a barrel (often because of a manufacturer defect) that leads to thousands of dollars of waste.

Distillery insurance protects in cases like these.

The same goes for raw material spoilage and damage to the product itself.

Product liability provides specific coverage that general liability terms might not.

Liability Coverage

Besides property insurance, all well-managed distilleries get “liquor liability insurance.”

It is a legal requirement in most states. Many states introduced so-called Dram laws to make drink-serving establishments liable for the actions of their patrons.

If a firm allows a person to become drunk on their premises, and they later get involved in a car crash or injure someone in a fight, the bar, restaurant, or club faces financial repercussions.

Most “general liability” insurance policies explicitly state that they do not cover liquor liability, meaning that establishments must buy it separately.

So what does any of this have to do with distilleries?

Most drinks makers are not in the business of selling drinks directly to customers.

They sell them to retailers.

It turns out that distilleries have more liability than they know.

Any distillery, for instance, that offers a tasting room or “experiences” during which patrons can indulge their beverages is potentially at risk from the Dram laws.

A person could become intoxicated on-site and then cause an accident in which a person loses their life on their way home.

Limiting the amount of liquor that a person can consume is, unfortunately, no defense, legally or otherwise.

As an operator, you have no idea how many drinks your patrons have had before they arrive.

The small quantities of alcoholic drinks you make available may be all that’s needed to tip them over the edge.

Liquor liability coverage, therefore, shields you from any legal costs the courts might impose on you, should a patron of yours damage property or cause injury after visiting your establishment.

The amount of coverage policies provide is usually high, but you need to go with an insurer who knows what they are doing.

General business insurance companies typically don’t have strong knowledge of Dram law cases, and the kinds of sums of money distilleries might be liable to pay.

Conclusion

When Laird & Co. came to us to manage their insurance, they made a prudent decision.

In choosing John B. Wright, they selected an insurer with specialist knowledge of the insurance landscape for distillers.

We provided them with a comprehensive policy that catered to their unique circumstances.

Other firms in the industry should follow their lead and do the same.

Finding a specialist agency that understands your operational requirements and can provide suitable coverage is vital for slashing risks and securing your cash position.