PAGE 4 A Time of Testing for Wineries Continued Lloyd’s became a leading insurance of U.S. wineries largely because of its expertise in writing “stock throughput” policies, which cover goods for damage from the point where they are produced to their final destination. Winemakers like to consider their craft as an art form. Indeed, the process of creating wine to particular specifications takes more care and consideration than many other commercial undertakings. It is not like cooking, where one can readily create another meal, or fabric work, where one can unravel a piece and start over. There’s much greater risk that an entire batch will be ruined. Serving the Public Today’s wineries are no longer merely producing a product, they’re providing an experience. To that end, growing numbers of owners of wineries and vineyards are opening them up to the public for tours, tastings, meal services, and catered events. Initiatives such as these open up a winery to a range of liability exposures linked connected to hospitality, ranging from simple “slip and fall” injuries to touring guests to illnesses from tainted wine to, most seriously, host liquor liability for injury or damage caused by a patron who became inebriated during a tasting. The stakes in this line of business have become huge. According to Forbes ,“what harmed regions like Napa and Sonoma the most in the months following the [2017] fires . . . was the perception that wine country was severely damaged and not open for business. Low hotel and restaurant occupancy in late October and November cost many wine regions financially more than fire damage.” The presence of liability risks amid a crisis in property insurance is a vivid indication that the owner-operators of a winery are not engaged in a hobby, no matter how passionately they engage in the enterprise. Insights for Your Industry E09-1027 PROTECTING YOUR PROPERTY 800.248.2888 | greenspanai.com Sheila E. Salvatore, Editor | Editor@AdjustersInternational.com Copyright © 2022 Adjusters International, Ltd. All Rights Reserved. Insights for Your Industry® is published as a public service by Adjusters International, Ltd. It is provided for general information and is not intended to replace professional insurance, legal and/or financial advice for specific cases. 1 Erin Delaney, “Industry on Tap: Wineries,” U.S. Bureau of Labor Statistics, Spotlight on Statistics,” August 2021; accessed at https://www.bls.gov/spotlight/2021/ industry-on-tap-wineries/ 2 Wines Vines Analytics, “U.S. Wineries by State, January 2022;” accessed at https://winesvinesanalytics.com/statistics/winery/. For WVA totals since 2009, see Statista, “Total number of wineries in the United States from 2009 to 2021;” accessed at https://www.statista.com/statistics/259353/number-of-wineries-in-the-us/ WVA describes its methodology for counting wineries as follows: “The Wines Vines Analytics winery database includes all unique virtual and bonded wineries. Bonded wineries are licensed by the [federal Alcohol and Tobacco Trade Bureau]; additional bonded production or storage locations under the same management are not considered as unique wineries and are not included in the counts. A virtual winery has a physical location (that may be another entity’s winery), produces at least one brand (may have multiple brands and/or produce for others) and has its own winemaker and management (may share either of these with another entity). The winery count excludes wineries that are no longer viable. The count excludes bonded facilities which produce non-wine product such as beer, spirits, hard cider, sake and blended cocktails.” 3 Carl Giavanti ,“Three Biggest Challenges Facing Small Wineries Today,”The Grapevine Magazine, April 8, 2019; accessed at https://thegrapevinemagazine.net/2019/04/ three-biggest-challenges-facing-small-wineries-today/ 4 Ibid. 5 California Department of Insurance, “Statement of Commissioner Lara on Governor signature on SB 11,” July 23, 2021; accessed at http://www.insurance. ca.gov/0400-news/0100-press-releases/2021/statement077-2021.cfm
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