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Beer Festivals: Liability Traps?
November 30, 2012
Beer festivals are one of the best ways to gain exposure for your brewery. However, these gatherings can cause some clear insurance gaps that are not often considered. In order to be certain that your brewery is properly insured at these events, you must consider both the property and liability involved for that festival and how your policy would respond.
A standard commercial policy limits the coverage to your business property (which is the named location and a 100 foot radius around the location). Obviously, while attending any off-site event, that criteria would not be met. Additionally, the value of your displays and product is not covered. In order to solve this problem, you can purchase an endorsement known as “Business Personal Property at Exhibitions, Fairs and Trade Shows.”
If you are collecting money at the beer festivals you attend, another insurance exposure must be considered: theft. Theft of money is limited whether you are at your location or outside your premises. Coverage is available for both situations but is quite often not automatically included in the base policy. Again, you can purchase coverage limits from $5,000 to $100,000 based on your exposure.
Transporting your product to an event opens up a third potential coverage gap. Typically, you would not have to provide insurance for your product while it is in transit because that is the responsibility of your distributor. Beer festivals are a unique situation because you are transporting your own product. In that case, the distributor’s insurance would not provide you coverage. A simple endorsement, known as “Property in Transit” or “Cargo Coverage”, can be added to your policy for very little additional premium.
Finally, sponsoring an event, such as a beer festival, can raise some interesting liability questions. While a general liability policy is normally quite broad in coverage, there is often exclusion for sponsoring special events. Insurance companies are afraid of the different events they might “automatically” pick up by including this important coverage. Before your business sponsors a beer festival or any other event, your insurance company should be notified to ensure coverage. A limited number of insurance packages automatically include this coverage for a limited number of events each year. Attending a beer festival can have an unintended impact on your insurance package.
Before you attend or plan your next event, check your insurance policy to ensure that you have the proper coverage. Your attendance could cost you more than you think.
To learn more about insurance coverage, contact Jason DeKuiper at 231.928.4005.
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