Fires, forklift accidents and recalls, they’re the stuff of nightmares for winery owners. For those with the right insurance coverage that considers every scenario, however, the peace of mind is worth every penny. What are some general insurance brokers forgetting, and how do operators ensure they have the proper coverage? Robert Fiume, a winery insurance advisor at CapriCMW Insurance Services and Okanagan winery owner, reveals the biggest mistakes operators make when it comes to their coverage.
Wine is Undervalued
It’s taken years - of growing, picking, crushing and barrelling - and now your wine is nearly ready to bottle. What happens if a forklift hits the tank of 10,000 litres of wine just weeks before bottling? Is your wine valued at bulk price, or selling price?
“Our approach to wine valuation is unique because we consider the market value of that wine at the time of loss, not just the bulk current value,” says Fiume, comparing the value of freshly crushed juice to wine that’s been barrelled for three years. “The closer it gets to bottling, the more value wine has, so we take that into account where other policies do not.”
Buildings and Offsite Locations are Missed or Undervalued
What if a fire strikes your cold storage building? Or an off-site storage facility? Will all of your property - on and offsite - be included and properly valued?
“We have an evaluator tool that helps gather all the underwriting details so we can ensure everything is being considered, confirming the current building replacement costs."
Fiume knows firsthand of winery operators who’ve experienced flooding or fire damage, only to find out they’re only covered for half of the building’s actual value. When a winery is undervalued and a claim is filed, the operator is penalized and shares the loss through coinsurance, receiving only a partial reimbursement. Fiume says some brokers also forget to ask about insurance for any off-site storage locations, often used to store wine inventories. “Most policies only give coverage for a specified, 30-day temporary location, but we offer coverage for unspecified locations, with certain limitations, and it’s not restricted to 30 days.”
Not Including Packaging Errors or Property in Transit
Operators don’t know they should have it, and many brokers don’t think to ask. Packaging errors—which occur more often than people realize—include bottling lines not being properly calibrated, leading to glass breaking, product recalls, mislabelling and more.
Property in transit coverage tops up the minimal amount that might be paid by a trucking company (which only goes by weight) if wine in shipping gets damaged in a truck accident, for example.
“You could be out thousands and thousands, so we have a beefy limit for that - $250,000,” says Fiume.
Forgetting Helicopter Landing Pad Insurance and Liability for Events and Tours
More and more wineries are accommodating helicopter landings, and while the helicopter firm carries their own liability insurance, Fiume advises operators to ask brokers about helicopter landing pad insurance
for liability coverage.
“What happens if you leave tools or a bucket on the landing pad and the wind picks up and that bucket hits someone?” Fiume says brokers who don’t specialize in winery insurance might not think to ask a simple but important question: What else are you doing on your property?
“Wineries are hosting more and more different kinds of events and tours, and if there were a hidden hazard and something happened to a guest, you’d certainly want to have liability.”
Not Disclosing Foreign Sales
Over the years, Fiume has met a number of operators who are confused about or unintentionally don’t disclose foreign sales, and policies don’t automatically cover foreign sales.
“Winery owners aren’t always clear on the true definition of ‘foreign sales’ when it comes to insurance, so it helps to have a broker who understands how that coverage works.”
Avoid these mistakes by consulting an insurance advisor with specialized expertise in winery insurance. At CapriCMW, our dedicated winery insurance specialist asks questions to uncover potential exposure and pitfalls, and provides the appropriate options and solutions.
Contact Robert Fiume at 250 869 3815 or rfiume@capricmw.ca.
