By Jason Jordan
For the Oregon Beer Growler
While means and methods will vary, one item that all craft brewers share is dependence on their equipment. That’s why it’s important to make sure you include equipment breakdown coverage as part of your insurance portfolio if you’re in the business of brewing craft beer.
When most of us think about insurance protection, we think of insuring against fire, wind, theft or injury to other parties due to our negligence. But what about an electrical arc that interrupts the power supply, a sudden compressor failure on a glycol chiller or the sudden breakdown of your mash tun or whirlpool? These can be expensive items to repair or replace, and the downtime may prove more costly due to the lost revenue and time it may take to get replacement equipment.
Most traditional property insurance policies exclude the sudden and accidental breakdown of mechanical, processing, and heating and cooling equipment. A separate equipment breakdown policy or endorsement (a policy addition) is often required to insure these items properly. Many machinery and equipment policies include coverage for ammonia contamination and product spoilage due to temperature or humidity changes when vital equipment is suddenly damaged.
Consider these scenarios:
--Your heating boiler explodes, causing extensive damage to your brewhouse and building. Equipment breakdown coverage can cover the damage to both.
--A gear in a bottling line suddenly breaks, shutting down production. Equipment breakdown coverage can pay for your cost to repair or replace the damaged gear, up to the limit of your policy, and could also cover your lost income or extra expense caused by the accident.
In addition to covering the specialized equipment used in your craft, consider routine breakdown of equipment common in many business categories: air conditioning equipment, air tanks, electric motors, electronic data processing equipment, fans and blowers, water heaters and more. All of these can be covered under an equipment breakdown policy or endorsement.
Consider this important coverage to round out your insurance protection. By insuring your equipment against failure or breakdown, you can greatly reduce the financial impact to your business when they occur.
Jason Jordan is the head of BING and a licensed property & casualty insurance agent at Ross & Associates Insurance Services Inc., in Portland.
For more information, feel free to contact him at firstname.lastname@example.org.