2022 Insurance Update – Brewers & Distillers
As we move on from the ‘hang-over’ of the COVID-19 pandemic, many insurance companies are seeing the benefits of a few years of premium increases. Most are reporting profitability in some select lines and have started to ‘stabilize’ their rate increases. Lately, we have been seeing around 5% premium increases for the Property & Equipment side of brewer’s insurance packages.
The main insurance issues ahead for all industries are an increased frequency of weather events, the impact of supply chain disruptions on the cost of construction materials, and increased inflation. Canadian Brewers and Distillers need to re-visit the replacement costs of equipment, raw materials and finished goods such as aluminum, glass and packaging materials. These costs could be up 20% to 40% and should be reflected in the insurance values.
As businesses ‘normalize’, those with restaurant and brewpub operations, along with events, live entertainment, or rental income, will most likely see increased minimum premiums due the Host Liquor Liability exposure that continues to drive the General Liability part of the insurance program.
Product recall continues to be an ongoing concern. While quality control of PH and oxygen levels is a top priority, even a small error in calibration of measuring equipment can lead to costly recall expenses. Insurance for those costs, lost income and reputational damages is available and should be part of your annual program consideration.
Automobile insurance premiums have been stabilizing in 2022. Making sure drivers have 3 years’ experience driving a similar delivery vehicle, have clean records, and are over age 25 will help keep premiums under control.
Cyber premiums are increasing 30% to 50% due to exponential increases in frequency and the demands of ransomware attacks. MFA (Multi-Factor Authentication) must be implemented in all areas in order to improve your eligibility for Cyber insurance.
Directors & Officers Liability has swung back to insurer profitability and some restrictive underwriting approaches are being eased off. That said, businesses showing less than stellar financials or those with any claims, particularly Employment Practice Liability (EPL) related wrongful dismissal, discrimination and harassment cases will continue to see premium increases.
What can businesses do to help minimize insurance cost increases?
Time can be a very valuable tool in the renewal and review process. Comprehensive policy evaluations and timely updates of revenues, operations, and assets will streamline your renewals. A review of deductibles can also help manage potential premium increases.
For the rest of 2022:
- Premiums will stabilize with minor increases.
- Valuations of current equipment and materials need to be prioritized.
- The need for quality brokers who know your business will continue.
Gallagher celebrates the importance of community and the businesses that they serve. Put the power of Gallagher behind your community and let us help you face the future with confidence.
For more information, visit our Brewery Insurance Webpage