Starting a distillery is a labour of love, one that entails mastering the nuanced art of distillation, carving out a unique space in a bustling market, and building a legacy steeped in tradition and innovation. Yet, amongst all the fun stuff, there exists a realm often overlooked until tragedy strikes –premise security, bespoke insurance, and rigorous stress testing.
It’s never something anyone wants to think about, nor really believes it will happen to them – but you have to.
Most of all, you must consider that it often pays (if you have coverage – literally), to invest your time and resources wisely in ensuring the security and longevity of your enterprise.
Mitigating generic security risks
Distillery security begins with a conscious acknowledgment of the plausible threats. Just like any other business – distilleries are often vulnerable to burglaries, internal thefts, and cybersecurity threats.
Protecting against these involves:
Solid perimeter security. Ensure well-lit premises, secure lockable doors, and robust alarm systems. Invest in a couple high quality cameras, namely as they are cheap and act as a good deterrent against the opportunistic grabs.
Security aside, you’ll get so many deliveries, they can double up to see who signed for what when you inevitably have to track a parcel down and can’t find it. Furthermore, if there is a delivery / loading accident, it’ll be recorded, which can be handy for insurance.
Internal controls. Regular audits and a culture of accountability can keep internal theft and unintentional damage at bay. For small teams, this may not be needed, but it is particularly important once you start to build up the rate of operations on the bottling line. Temporary workers, multiple shifts changing over – it’s easier to foster a culture than it is to fix an issue. The same is true for those who hold a large amount maturing in storage under bond long term.
Cybersecurity. Protect your digital assets through regular updates and employee training. False invoicing via cloned mails, and fake accounts being set up, and banking details asking to be switched for all new payments being sent to suppliers are all things that have happened distilleries in 2023 alone. Digital Security is too easily overlooked.
The stress test
Stress testing isn’t merely a theoretical concept, but a dynamic practice aimed at foreseeing potential issues and addressing them proactively.
Hiring an expert. Consult with a security and safety expert to asses the risks and what needs to be done to mitigate them. It doesn’t cost much and while it’s frustrating to have someone go around telling you the countless ludicrous ways someone can die, get injured, set the whole place on fire and contaminate entire ecosystems at the detriment of all future humanity – there’s validity in it too. It’s easier to be told and avoid it, than dealing with getting it wrong…
Implementation. It’s vital to transition from having a detailed security and contingency plan into actionable steps. Include how you will implement the suggested measures into your daily operations.
Health and Safety. Plan, implement, review. See more in our article about it here.
Distillery specific insurance
A wise choice is to invest in a distillery-specific insurance plan that understands the unique risks inherent to your operations.
More than on a policy level, your choice of an insurance provider should be one that’s acquainted with the distillery landscape. There are specialists out there. If you don’t pick wisely you might end up not being fully protected and yet, still be paying for coverage anyway.
Risk & coverage areas to consider
Distilleries are environments rich in flammable substances, making fire risks a prominent concern. They should be far higher on the list than any security concerns you may have.
Because of this, no standard insurance is going to have fire provisions for the type of operation you are running. There are so many potential areas they can contest if something goes wrong. You need insurance that takes into account fire risks given what your primary production involves – making alcohol, rectifying it to high ABV and storing it.
It’s worth noting that a distillery fire will at best, wipe out everything. At worse, it will do that and loss of life. It’s not just a bit of inventory, or going temporarily cause issues – it’s dramatic and scary. Moreover, when they happen they often need a scorched earth approach to rebuilding. That’s hard enough, but if it involves maturing stock, it will take years. Does the policy cover for that kind of business interruption?
Operational hazards can span from injuries to personnel to equipment damage, necessitating a comprehensive insurance cover. Check what’s included and consider the size and scale of your operation. For personnel injury, check what training they need so that you don’t have issues with your employers’ liability cover. Meanwhile, check what information you need to provide about the equipment you have, as some insurers will insist on certificates and condition checks…
Product liability and food safety and hygiene. Distilleries are in the food and drink sector – be aware of what that involves and how to meet the standards required.
Let’s list a few smaller, but distillery specific insurance issues all at once…
Loss of licence, seasonal increases in stock inventory, exhibition liability insurance, goods in transit, loss of income following contamination, deterioration of stock for from factors beyond your control, liability arising from guest tours, or events you may undertake at your premises. There’s a lot of small factors that can add up.
Stop thinking theft and security when you think insurance – understand which are important to you and when.
Consider a site Inspection. If applicable, invite your insurer for a site inspection to point out potential areas of concern. The more they know, the better they can help and the better your cover.
Proactive measures for lasting peace of mind
Proactive security and safety measures are often statutory requirements. Even when they are not, when the unexpected occurs, you want to have safeguards in place.
It doesn’t take long to look into premise security, the specificity of your insurance plan, and the robustness of your operation. Stress testing and contingency planning doesn’t have to be stressful nor apocalyptic. It can actually foster a wider culture of accountability and a relentless pursuit for better quality at every touch point.
Take control of this area of your operations and you’ll find the chances of something happening are significantly lowered in the first place…
