Vineyard & winery insurance:

A business owner’s guide

The art of winemaking has aged, well, like a fine wine. Today, this traditional craft is alive and thriving. As a winery owner, your goal is to delight, and occasionally surprise, your customers with every sip.

It’s a rewarding career – but with reward comes risk. With the right insurance and risk management plan, you can protect your business, employees, and customers.

In this guide, we’ll cover:

• Who needs winery insurance?
• Why do vineyards and wineries need insurance?
• What kind of insurance do wineries need?
• How much does winery insurance cost?
• Do wineries need alcohol surety bonds?
• Managing risk as a vineyard or winery
• Choosing a risk partner that understands your winery

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Who needs winery insurance?

Winery insurance provides essential protection for any vineyard or winery owner. This includes:

• Vineyard owners
• Winery owners
• Wine tasting rooms
• Wine tours and events
• Wine importers and exporters
• Wine retailers

Why do vineyards and wineries need insurance?

Vineyards and wineries need insurance to protect them from financial, legal, and reputational risks.

Businesses face a variety of risks in the winery industry. One of the biggest: property damage.

Vineyards and wineries are vulnerable to natural disaster risks like wildfires, floods, and severe weather. These events can damage or destroy crops, buildings, and equipment.

Other risks faced by wineries include:

• Contamination or spoilage
• Business interruption
• Employee or guest injuries

Insurance coverage can help you safeguard your assets and mitigate potential liabilities.

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What kind of insurance do wineries need?

There are many types of insurance that could benefit your business. That’s why it’s important to follow a consultative approach to understand the full scope of your exposures. Then, your agent can help identify insurance solutions to mitigate your risk.

The policies we typically recommend for wineries are:

• General liability insurance
• Workers’ comp insurance
• Liquor liability insurance
• Business interruption insurance
• Commercial auto with HNOA endorsement
• Commercial property insurance
• Crop insurance
• Equipment breakdown coverage
• Product liability insurance

Let’s explore each policy and when your business might need it.

Required insurance for vineyards and wineries

Legal insurance requirements are determined by your state’s Department of Insurance, health regulatory agency, and lease contracts. Thus, the coverage required for your business depends on which state(s) you operate in and your contractual obligations.

Your insurance agent can help you identify the specific requirements for your business.

General liability insurance

General liability insurance covers claims that your business caused third-party injury or property damage. It helps protect your company from financial losses due to lawsuits or other legal claims stemming from your operations such as a trip and fall, illness, or even personal injury.

When we recommend general liability

Some states require certain types of businesses to carry general liability coverage. Even if not required, GL provides fundamental protection for your business. We recommend it for every business that interacts with the public or customers.

Workers’ compensation insurance

In most states, businesses with a certain number of employees must carry workers’ compensation. Workers’ comp covers medical bills and lost wages for employees who are injured or become ill on the job.

When we recommend workers’ comp

This no-fault insurance policy protects you and your employees from the financial impact of workplace injuries. Each state has different workers’ comp requirements, but we recommend it for most businesses with employees.

Liquor liability insurance

Liquor liability insurance protects you from legal claims and financial losses arising from alcohol-related incidents. This essential coverage is required by many states and commercial leases.

It typically covers:

• Legal defense costs
• Settlements
• Judgments

When we recommend liquor liability

In most states, a liquor license and liquor liability insurance are legally required if you serve alcohol to be consumed on the premises. 

Even if your business’s primary purpose is not serving alcohol, if you serve it at special events, you should consider liquor liability coverage.

Essential insurance policies for wineries

These policies are likely not required, but we consider them essential coverage for wineries.

Business interruption insurance

Business interruption coverage, also called business income insurance, protects businesses against financial losses due to unexpected interruptions to their operations. It typically covers:

• Lost profit
• Payroll
• Rent or mortgage payments
• Utilities
• Ongoing business expenses

Examples of covered interruptions include natural disasters, power outages, and unforeseen equipment failures.

When we recommend business interruption insurance

We recommend business interruption coverage for any business owner who wants to mitigate the risk of disruptions caused by unexpected events.

Commercial auto with HNOA endorsement

Commercial auto insurance covers vehicles used for business purposes. In most states, it’s required for commercial and personal vehicles. In case of an accident, it helps cover the cost of:

• Repairs to your vehicle
• Medical costs
• Damage to property
• Legal expenses if someone sues you

If your employees use their own vehicles for business or deliveries, their personal auto policies might not cover accidents on the job – or may not sufficiently cover your business. A hired and non-owned auto (HNOA) endorsement covers your business for liability-related claims stemming from the use of vehicles not owned by your business.

When we recommend commercial auto and HNOA

We recommend commercial auto for businesses that use vehicles for business purposes, such as deliveries. If employees are using personal vehicles for business, we also recommend the HNOA endorsement.

Commercial property insurance

Commercial property insurance protects your building and physical property from events like:

• Fire
• Theft
• Vandalism
• Hail, windstorm, lightning
• Natural disasters

It covers financial losses from property damage, lost income, and other expenses while recovering.

When we recommend commercial property

We recommend commercial property coverage for most businesses that own or rent property, including buildings, equipment, inventory, and supplies.

Crop insurance

Crop insurance protects vineyards from financial losses caused by damage to vines or loss of their grape crops. This specialized coverage covers losses due to:

• Fire
• Windstorm
• Theft
• Vandalism
• Natural disasters

When we recommend crop insurance

We recommend a crop insurance policy for any vineyard or winery business that cultivates grape crops.

Equipment breakdown coverage

Equipment breakdown is an endorsement that can be added to your commercial property policy. It covers unexpected mechanical or electrical failures of your essential equipment. It covers:

• Repair or replacement costs for damaged equipment
• Losses from business interruption due to breakdown
• Spoilage or contamination due to equipment breakdown

When we recommend equipment breakdown coverage

We recommend an equipment breakdown endorsement for any business that relies on expensive and highly-specialized equipment like HVAC systems and walk-in coolers.

Product liability insurance

Product liability insurance covers claims that your product caused injury or property damage. It’s a common policy for businesses that manufacture or sell products. It covers costs related to a product liability claim, such as:

• Legal defense
• Settlements
• Judgments

When we recommend product liability

We recommend product liability coverage to any business that manufactures, distributes, or sells physical products – like food and drink.

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How much does winery insurance cost?

Insurance carriers calculate your premiums using several factors:

• Business size and revenue
• Location
• Claims history
• Coverage limits

Because insurance costs can vary, it’s important to work with a risk manager to find the best solution for your business. Businesses with complex risk profiles will find the most value from partnering with an independent agent that will help them proactively manage risk for long-term success. Learn more about the benefits of integrated risk management.

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Managing risk in the wine business: 4 common risks

1. Property damage

When you have specialized winemaking equipment and facilities, the costs to repair and replace damaged property can skyrocket quickly. Events like fire, flooding, and equipment malfunction can set you back significantly.

To reduce your risk of losses from property damage:

• Properly maintain all systems like fire protection, electrical, plumbing, and HVAC
• Provide employees safety training including material handling, hazard identification, and emergency response
• Carry adequate commercial property insurance and crop insurance

2. Contamination or spoilage

The quality of wine can be compromised by improper storage, temperature fluctuations, or contamination during production. These issues can harm your customers, hurt your reputation, and lead to legal claims.

To mitigate these risks:

• Train staff on strict food safety protocols, including proper storage, handling, and preparation
• Keep detailed records of ingredient sourcing, food temperatures, and cleaning procedures
• Protect yourself with product liability insurance

3. Business interruption

A winery’s success depends on a functioning supply chain and a steady flow of customers. A bad crop yield, natural disaster, or power outage can disrupt the winemaking process and lead to financial losses.

• Create a comprehensive business continuity plan outlining your responses to various scenarios
• Invest in backup generators and redundant systems to minimize the interruption of these events
• Carry business interruption insurance to minimize financial losses

4. Employee or guest injuries

Safety is crucial in the hospitality industry for both your employees and your guests.

A serious employee injury can cost a business hundreds of thousands of dollars, impact operations, and lower employee morale. And if a customer is injured on your premises, you could be held liable for medical expenses and other damages.

To mitigate the risk associated with injury liability:

• Create clear safety policies and protocols and provide regular staff training
• Conduct regular inspections and maintenance of your facilities
• Display safety signage and mark emergency routes
• Get adequate workers’ compensation and general liability coverage

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Choosing a risk partner that understands your winery

To protect the business you’ve worked hard to build, insurance alone is not enough. It’s crucial to identify the most critical threats and make strategic decisions that will allow you to grow your business without disruption.

When it comes to risk, vineyards, and wineries face unique challenges. We’re right there with you – we work in the food and beverage industry too. We just happen to be on the risk management side.

When you partner with POWERS, we’re more than your insurance agency. We’re a true business partner invested in your success. Our philosophy combines: