Insuring a brewery in India

Start with what can actually go wrong

Before you talk to anyone selling a policy, write your own list of what could stop the business or cost it serious money. For a brewery or brewpub in India the list usually includes fire, flood in the monsoon, theft, equipment failure, power problems, a guest injured on the premises, a staff accident and a batch of beer that has to be destroyed.

Then estimate what each would cost in money and in days closed. That list is your brief for the broker. Without it, you are buying whatever package is easiest to sell.

The usual building blocks

Policy names and wordings differ between insurers, but brewery cover in India is commonly built from pieces like these:

• Property cover for the building, fit-out, brewhouse, tanks and stock against fire and named perils such as storm, flood and earthquake. A standard fire and special perils policy is a typical starting point.
• Burglary and theft for stock, cash and equipment.
• Machinery breakdown for the chiller, boiler, compressors and electrical panels, which property cover often excludes.
• Business interruption, sometimes called loss of profits, for income lost while you rebuild after an insured event.
• Public liability for injury or damage to guests and visitors.
• Product liability if beer leaves your premises in kegs, growlers or cans.
• Employee cover for workplace injury and, often, group health. Some of this is a legal requirement, so ask your adviser what applies to your headcount.
• Goods in transit if you deliver kegs to other outlets.

The gap that catches brewers: spoiled beer

Here is a scenario worth taking to your broker. The chiller trips at 2 AM, nobody is on site. By morning a fermenter full of lager is sitting at 25 °C instead of 10 °C. Nothing burned. Nothing was stolen. The beer is still a write-off.

Ask in writing whether stock deterioration from machinery breakdown or power failure is covered, under which policy and with what excess. Ask the same question for a CO2 supply failure and for contamination. The answer is often "no" or "only with an extension". You want to know that before it happens rather than after.

Insure the right values

Under-insurance is common and expensive. If the sum insured is lower than the real value, many policies reduce your claim in proportion. Insure equipment for what it would cost to replace today, including import duty, freight and installation, rather than the depreciated figure in your books. Stock values move with the season, so tell the insurer how you will declare them.

Keep an asset register with serial numbers, invoices and photos. You will need it on a bad day.

Review the values every year at renewal. A brewpub that added two fermenters, a canning line or a second outlet since the policy was written is probably under-insured without knowing it.

Reduce the risk you are paying to cover

Insurers price what they see. The cheapest claim is the one that never happens. A high-temperature alarm on the glycol loop that sends a message to the brewer's phone costs little next to a lost tank. So do fire extinguishers that are actually serviced, a CO2 leak detector in the cellar, clear exits and a written cleaning-chemical procedure. Some of these are also conditions of cover, so ask what the insurer expects to see on a survey visit.

Questions to ask before you sign

• What is excluded, in plain words? Read the exclusions page first.
• What is the excess or deductible on each section?
• Is flood or water entry covered for a ground floor or basement site?
• How long does business interruption pay for? From which day?
• What does the insurer need from you to keep cover valid, such as fire safety certificates, alarms or a night watchman?
• How do I make a claim and how fast do I have to report it?

Use a licensed broker or insurance adviser and keep every answer in writing. This guide describes the process; it is not insurance or legal advice.

Fold it into the plan from day one

Premiums belong in the business plan as a fixed cost. Some lenders and landlords will ask to see cover before they release money or keys. Insurance sits next to the licences on the compliance checklist for a reason. The founders who sleep well are the ones who matched their cover to their own list of risks rather than to a generic package.

Common questions

Is spoiled beer covered by standard property insurance?

Often not. Stock lost to a chiller failure or power cut may need machinery breakdown cover or a specific extension. Ask your broker to confirm in writing.

Do I need product liability insurance for a brewpub?

If beer only ever leaves the tap into a glass on your premises, public liability may carry most of the risk. Once you sell kegs, growlers or cans that leave the building, ask a broker about product liability.

Should I insure equipment at book value?

Usually not. Insure at current replacement cost including duty, freight and installation, or a claim may fall short of what it takes to get brewing again.

Is this guide insurance advice?

No. It explains the process and the questions to ask. Use a licensed broker or adviser for your own cover.