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Insuring Wine from Vine to Bottle

Grapes on the vine in a winery
There are more to vineyards than what meets the eye.

Staring out at a picturesque vineyard at your favorite winery, you may assume that what you are drinking is grown and produced in this beautiful setting. But grape growers and wine producers know that, from the vine to the bottle, every journey is unique.

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“The reality is almost every winery does it a little differently. Most people don’t understand that a winery, is not just a winery,” says Jenna Weber, a wine and vineyard risk management and insurance specialist at PayneWest. “Do they farm? Do they have a crushing facility? Are they making wine or are they just a tasting room?” Unique business models lead to unique risks and exposures for each business in the wine industry. For Weber, when working with clients, it begins with a conversation.

“When meeting with a client for the first time, I sit down with a pen and blank sheet of paper and we literally draw a map of their production and workflow,” said Weber. “In addition to looking at their own exposures, we talk about every supplier and entity that they have a relationship with. It helps me to discover if they are reliant on another business for their success. If a major supplier or vendor had something happen that would halt operations, then we may need to look at contingent business interruption coverage and review contracts to make sure that exposure is properly covered at every step.” Utilizing PayneWest’s Riscover process helps guide our conversation with clients to discuss all the insurance and non-insurance solutions to help manage their risks and exposures.

Weber describes it as passing the baton. One of her clients buys and transports grapes from a vineyard in Benton City, Washington, contracts with a partner to crush and produce the wine at a separate location and then sells the wine at a tasting room in Seattle. “I need to know who has the baton at each one of those steps to make sure that my client’s product is properly covered. I review the contracts and then look at polices to make sure that insurance requirements are being met,” said Weber. After this in-depth contract review, Weber offers recommendations. “If the product is in the care of a partner, they should be insuring it. In some cases, we recommend that we transfer the risks to a vendor or in other cases we discuss who is primarily responsible for insuring that risk.”

Evaluation

This also includes proper valuation of the wine itself. “Are you are producing and selling a $22 wine or a $200 boutique wine? If there was a huge leak or contamination at some point, having the proper valuation is the difference.”
For Weber, this is all part of an ongoing discussion with clients and an annual risk evaluation. “We are not trying to complicate the process for our clients,” said Weber. “Having the right insurance and contracts in place actually makes it much more straight forward.”

She describes that insurance companies and underwriters actually prefer that contract language with a vendor or partner includes the insurance requirements. If it is not spelled out in a contract, underwriters may have difficulty making decisions on the coverage. Having the right contract language in place makes it much easier to get the right insurance coverage in place.

In the end, the goal is to remove the uncertainty. “The last thing we want to happen is that there is an incident and there are questions about the coverage. Going through the PayneWest Riscover process allows us to be confident that if someone has a bad day, no one is going to wonder who is responsible.”

 

 

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