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BeerA couple of decades ago, who would have imagined that American craft beer would be shaping the taste of beer in places like Belgium and Germany? Welcome to 2015: American craft beer exports are on the rise and to a surprising array of countries around the world. This is a welcome development in the craft beer industry and in the American economy, without question. But exporting craft beer does carry some risks that brewers need to know about.

Look Before You Leap

In such a highly competitive and fast growing industry, enthusiastic brewers who are considering the export market should first understand that exporting beer brings about additional liability.

Just like here at home, the laws of the importing country will hold you responsible for any losses, damages or injuries caused by your product. And the product liability laws in importing countries are becoming stricter all the time. Product liability suits can be brought against exporters for three reasons:

(1) Negligence;
(2) Strict Liability; and
(3) Breach of Warranty.

Beyond the possibility of simple product defects, exported beer is especially vulnerable to liability issues inherent in long haul shipping, transportation, handling, and storage requirements.

Warning: There’s Legal Liability In that Bottle of Beer

When a product liability suit is filed against an American company in a foreign state, that company is required to pay legal fees, court costs, and any awards the judgment entails. Without an International Liability insurance policy, the costs are not covered and can destroy a small business.

The cost of fighting a lawsuit – warranted or unwarranted – represents a big financial hit to your bottom-line and has lead some companies to bankruptcy. Foreign jurisdictions can also seize any and all assets including inventories, deposits, and even receivable payments.

Covering Your Ass-ets

Without giving it a second thought, companies obtain insurance to protect themselves domestically. But brewers who enter an overseas market need to protect their businesses with additional international product liability coverage.
An International Product Liability policy only costs about $2,500 annually, depending on the volume of beer exported and the countries in question. This is a modest cost compared to the devastating impact you find on the other end of a lawsuit without proper coverage.

Simply put, international product liability insurance helps minimize the risk of doing business abroad. Policies are designed to cover any medical costs, court fees, lawyers’ fees, compensatory damages, economic damages, and punitive damages accrued if a claim is made against you.

There is good reason for American craft brewers to get into the exporting business. And there is good reason to protect yourself against undue risks.

microbrewery insurance food truckFood trucks are a great way for breweries to get more patrons to their tasting room.  Patrons that are able to eat at your tasting room will likely stay longer, bring more people with them and drink another beer or two.  It is a win-win for the breweries and food trucks.  But have you considered the additional liability you may be taking on and how to protect yourself?

When you allow a food truck onto your property or give them the express permission to patronize on the public street outside your brewery, you are taking on what is called Vicarious Liability. This means that based on your permission and implicit recommendation to your clientele to eat at these food trucks, you can also be liable for damages they cause.  Food poisoning, an auto accident, a slip and fall from oil spilled from their vehicle are possible examples.Read More

Breweries run on cash flow. Purchasing raw materials, new equipment and making payroll are top of mind, but one often neglected item can put a serious crimp in your cash flow for a couple months making brewing life more difficult…Insurance Audits.  Below, I outline how to best avoid big audits and keep your cash flow flowing.

First, your liability policy premium is based on your brewery’s revenue and your work comp policy premium is based on your brewery’s payroll.  At year end, these insurance policies are audited by the carrier to ensure they received enough premium to cover your exposure. If you overstated your revenue and payroll at the beginning of the policy, you get a refund. If revenue and payroll were understated, you owe the carrier more money.

In the current craft beer environment where revenue and payroll are growing as fast as can be, there are never refunds.  Read More

Nothing can keep your insurance costs low like having a clean workers compensation claim history. How can you have a Workers’ Comp claim without increasing the losses on your policy? The answer: First Aid Claims. While that is often out of your control when it comes to a claim with any severity, you can pay for medical care for minor injuries directly to the medical provider.

As with any regulation, there are a list of qualifications you must know in order to navigate what is and what isn’t a first aid claim.

First Aid, as defined by the California Labor Code and Regulations, is any one-time treatment, and any follow-up visit, for the purpose ofRead More

Over on JD Supra, a legal magazine website, is an excellent article on Trademark registration. The article is written by Nancy PHam with Lane Powell PC, a law firm in the Pacific Northwest.  Below is an excerpt of the article with a link to the full text as well.

“For microbrewers, taste and memorable names mean everything. Loyal customers often ask for specific brews and word-of-mouth advertising is indispensable, since microbrews are often purchased in local restaurants and bars.

Like many small businesses though, protecting your microbrewery brand and trademarks often raises a basic financial issue: Is it worth it? Read More

Over the last week or so, I have come across some links that are either informative or entertaining, and all have to do with beer or breweries.

The first one is about how some breweries have used their websites’ “under 21″ redirect and sent underage kiddies off to various more appropriate sites.  My favorite is the Black Acre Brewery’s use of this. Check out the story at The Daily Meal. Head on over to the Black Acre Brewery and click on 21 if you want a song stuck in your head for the rest of the day.

Save-On-Brew has an article showcasing 10 vintage beer cans worth up to Read More

All my clients know that I insist that they take a look at earthquake insurance. It is absolutely essential to the long-term survival of your brewery.  However, I will save the scary earthquake scenarios and important coverages for another blog post because I have an awesome video I found to show you.

I was Googling articles on racking system safety and happened upon a video from Western Square. They provide racking systems for breweries, wineries and distilleries. They have developed an add-on to the bottom rack with stainless steel ball bearings that help keep your barrels upright when the ground starts shaking.

As a disclaimer, I am not a geologist or physicist (believe it or not), so I cannot and am not stating that this is the only and final solution. However, it is worth a look and further study in order to increase the safety of your property and, more importantly, your employees who may be near the stacks when an earthquake happens.Read More

If you are in the insurance business, it doesn’t take long until you discuss “fraudulent claims” with a client. Several times a year I field this issue with a client and it certainly is a delicate issue.

Before discussing procedure, understand that this is as much of an emotional issue as it is procedural.  Business owners feel violated in this situation. Below is what I hear from clients in this situation.

  1. They feel as if they are being stolen from (time, money).
  2. They resent having to keep this person employed while on the claim.
  3. They are afraid and unsure of how to proceed. Someone who would file a fraudulent claim would certainly file a fraudulent lawsuit if they are fired.

These feelings of anger and fear are understandable and warranted. Let’s discuss how to proceed before any rash moves are made.Read More

Brewery Volunteers - Work Comp CoverageBrewery owners often ask me if volunteers are covered on their workers compensation policies. Start-up breweries often use friend and family volunteer labor in order to keep costs low. Other breweries like to give back and help aspiring brewers hone their craft.  Others exchange work with a volunteer. For example, a volunteer who is an IT expert gives the brewery IT support in order to be able to learn the craft of brewing. Whatever the reason for using volunteers, you are exposing yourself to uncovered medical claims if you don’t ensure they are covered on your workers’ comp policy.

So, what’s the answer? Are they covered? Well, Read More