Common Claims in Breweries and Wineries and How to Address Them

Posted in Legal Alerts on November 18, 2022

The boom in craft breweries and premium wineries means there are more entrants into the business. Insurance companies are seeing a corresponding uptick in claims from breweries and wineries. The current economic conditions, especially inflation and labor shortages, are introducing new risks and increasing old ones at these businesses. Brewery and winery companies should seek out advice on risk mitigation strategies to help avoid large losses. Here are some of the most common claims insurers see resulting from operations at wineries and breweries.

Auto Accident Liability

Breweries and wineries must make regular deliveries to bars and liquor stores. Businesses are having a much harder time finding experienced drivers in this time of labor shortages. Truck drivers are in short supply in this economy, with an already pressing shortage growing worse in the wake of the pandemic. In some cases, businesses have had to press employees into service who do not have commercial driving experience. They may even be using their own personal vehicles to run corporate errands and make deliveries. A brewery or winery business can be held legally responsible for acts that employees commit when they are on the job, including causing auto accidents.

Businesses need to be careful about who they allow to drive on their behalf, considering the potential liability. To the extent possible, they should restrict employees from using their own vehicles for corporate business. If they must do so, they should closely check an employee’s driving history in order to limit risk exposure.

Spontaneous Combustion

Fermentation of alcohol means there are contents under pressure, with the fermentation process producing a large amount of carbon dioxide. The fermentation process also relies on chemical agents that are stored together in a closed-off space. There is always the possibility that a careless employee could do something that sparks a fire or chemical reaction. Spontaneous combustion can result in a powerful explosion, threatening both the brewery or winery and neighboring businesses.

There are certain dangerous practices around chemical agents that all employees should avoid. Businesses should train employees and arm them with the knowledge to avoid these potential dangers. Only certain employees should be allowed to work with dangerous chemicals, and they should be trained in the best practices for how to store and use them.

Leakage

Breweries and wineries rely on tanks to store their products during the fermentation process. These tanks are massive vats that store large amounts of fermenting alcohol. There is chemical activity in the vats. In addition, the fermentation process relies on dangerous chemicals that could cause harm when they come into contact with human skin.

As breweries and wineries grow their businesses, they may need to purchase new and larger vats. A business cannot simply just purchase a larger vat and put it into place. It also needs to upgrade the pad and area around the vat in order to properly support it. Further, careless employees driving forklifts around a plant can crash into a vat, causing significant leakage.

In addition, employees need to be thoroughly trained in the proper use of chemicals in order to avoid possible leakage. A leak can create inverse pressure that can cause the tank to collapse on itself like an aluminum can. If that happens, there will be flooding that can destroy a brewery or winery.

Can Corrosion

A brewery or winery can also be legally responsible for damage caused by its products once they leave the building. Companies have been diversifying their product lines, and they are more often selling drinks in cans. They must take care to select the proper can. If not, the cans can corrode and leak liquid that can damage a liquor store, distributorship, or restaurant or bar. A brewery or winery must balance the attractiveness of its packaging with its safety and integrity.

Not every can is well-suited for a certain alcoholic product. Different drinks have varying pH levels, which in turn could require different types of cans. Before selecting a can, a brewery or winery should extensively research and consult with its vendor. If a defective product causes damage to a purchaser, the brewery or winery can potentially be held responsible.

Event Claims

Breweries and wineries have been turning more and more to festivals and events to increase their revenue. They may open their doors for tastings, or they may serve their products at other places in the community. When customers are on the property of a brewery or winery, the business may be liable for injuries caused in a premises liability incident.

A brewery or winery participating in a festival or other event needs to prepare ahead of time to maximize safety. These steps could include obtaining the necessary permits and alerting area EMTs in advance for the potential for incidents.

In addition, a brewery or winery could have possible liability exposure if an intoxicated customer causes harm to others. Breweries and wineries need to train employees ahead of time on best safety practices at events, especially recognizing intoxicated customers. Finally, a business must make sure it has the proper insurance to cover it from all potential liabilities that could arise at an event.

These are just five of the common legal risks that breweries and wineries are now facing, though the nature and character of potential dangers can change. Breweries and wineries need to stay ahead of the curve in identifying potential threats and getting out ahead of them. Working with an experienced attorney can help them anticipate and address potential legal risks. Risk management is not something a brewery or winery can—or should—only address once every so often.