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Jennifer Towne 0:12
Hi and welcome to Acadia explains Acadia’s new podcast designed to illuminate, educate and empower our independent agency partners to the sharing of information and ideas on insurance, the awesome industry that we’re in, on our communities, on our business and on life. My name is Jennifer Towne and today we have a fun topic for today’s episode. Beer! Breweries to be specific. Breweries have taken off in the northeast over the last five years and have been a bright spot in our local economy. Today we’re going to learn more about the business of beer and the insurance challenges that can exist with this vibrant industry. Our guest today is Chris Streeter, property lines manager at Acadia insurance. And Chris is here to speak to us about the unique insurance exposures and challenges that can exist when ensuring brewery operations. So Chris, welcome to our show, and first ever recording of Acadia explains. Thank you for being our guinea pig.

Chris Streeter 1:03
Glad to be there.

Jennifer Towne 1:06
So Chris, can you start off please by giving us just a quick 60 second bio about yourself and your background?

Chris Streeter 1:11
Sure. Yeah, I’m here at Acadia. I’ve been here for the last 12 years, I oversee the property line of business, specifically from an underwriting perspective. But my background is actually has its roots in loss control. So many, many moons ago. Yeah, it was a loss control engineer for a good 15 years and then transitioned to underwriting. So yeah, I understand the risk management piece from a property perspective, both underwriting exposures coverages. And I also understand with boots on the ground, what it looks like from a loss control perspective.

Jennifer Towne 1:44
So you have a broad background, and you started in loss control. How did you get into lost control in the first place?

Chris Streeter 1:50
Yeah, I got my degree many years ago in mechanical engineering, and the job market was not very good at the time, and not finding an engineering job. I called my dad who was working for a computer company and asked him who provided their insurance coverage. And he goes, why do you want to know that? He said you have a degree in engineering. And I shared with him that an insurance company had come through UNH where I was going to college, and they were looking for fire protection engineers. And I asked him, I go, I think it would be a cool profession. And he said, Well, he goes, let me find out who does the insurance. So he gave me a name and a number. Once he spoke with the risk manager at the insurance company, I cold called them and 30 something years later, I’m sitting here talking to you about beer. So yeah, it’s an industry that, obviously I started in it, and I’m still in it. And yeah, I really like being an insurance professional. It sounds weird to have those words flow out of my lips. But now I’ve met some great people bend to some great places. And yeah, you don’t go to the same business every day. When your insurance, all these different risks. So you really get to see kind of everything in anything. So it’s been awesome.

Jennifer Towne 3:07
That’s awesome. I’m right there with you who I would never have predicted that. You know, five years ago, even three years ago, I’d be sitting here doing a podcast on insurance.

So we’re going to talk about beer, which is pretty awesome. We’re talking about breweries. It is a vibrant industry, growing rapidly. And we launched our program at Acadia about, what five years ago and it’s been really successful. ballpark about how many breweries do we right now?

Chris Streeter 3:34
We are closing in, I think in about 270 breweries, and that covers the states of all of our footprint. So New York, Connecticut, Vermont, New Hampshire, Maine, Massachusetts. I think we may even have a couple in Rhode Island. But yeah, to your point, it was like everybody likes beer. And so yeah, it hasn’t been just a specific state that has provided this opportunity for us. It’s been everywhere and all of our states. So it’s been a lot of fun.

Jennifer Towne 4:05
Awesome. That’s great. It’s been a fun to watch it grow. And you were a part of that success. You helped build the program and customize the coverages that were put together for it. Can you tell us a little bit about the coverages that you helped assemble to tailor this program for breweries?

Chris Streeter 4:21
Yeah. So when we decided to get into this space, from an insurance perspective, we started to ask a lot of questions, find out what the coverages were that were unique and important to anybody that was going to be brewing beer. And so we put together an expansion endorsement for our property line of coverage. It’ll cover the tanks that they have, they’re both whether they collapse, which will happen from time to time or if they leak. We’re also covering the process water that they use. They don’t normally use just tap water to brew their beer. So they’ll often have water that’s been treated. So obviously you want nice clean clear water to use and it’s worth more than just tap water so we have an endorsement that will cover that and last but not least is key employee coverage so that would probably be the biggest coverage that I would see that we’re offering our expansion endorsement that would provide a lot of meaning to the brewers if in the unfortunate event that they have a loss if their brewer master is out of work and he or she decides to go somewhere else to continue their career once you put the pieces of your brewery back together and you’re back up and running you may need to lower a brew master away from another opportunity that they have right now so having some coverage to put some resources towards that to get that done is super meaningful to these breweries.

Jennifer Towne 5:50
Absolutely and so you mentioned loss so let’s talk a little bit about major losses so like if there’s a catastrophic loss like a fire or whatnot what what’s the downtime look like for brewery I mean they’re a manufacturing operation they have equipment; what are some of the hurdles that they’re going to encounter?

Chris Streeter 6:09
so you can imagine being an insurance company we’re in the business of paying losses and we’ve had a couple of breweries that have had losses so typically these breweries when they’ll show up in some of these main street areas they’re either in an old industrial space or even an old combustible building that’s been repurposed and when they end up having a lot of say a sizable fire a lot of the equipment that they use in there is custom and it’s unique and they may be down a good six 9, 12 months depending on how big the loss is if it just ends up being a piece of process equipment that leaked or get damaged that’s probably something that’s repaired in weeks’ time and you may have to replace a batch of beer or something like that that would be part of the loss but on a sizable fire or some other damage whether it be lightning or frozen pipes yet you could be looking at months of downtime.

Jennifer Towne 7:04
Wow, and are there any valuation concerns regarding that I mean these are typically smaller accounts smaller premiums you know are they getting enough BI coverage to cover that?

Chris Streeter 7:18
So from a business income perspective the thing is they’re growing so fast and you want to be looking forward and what your perspective sales are so if you have somebody that’s just opened their doors three months ago and have 1000s of dollars’ worth of sales it could be 10s or hundreds of 1000s of dollars of sales next year so we always want to make sure that we’re having a continuing conversation with some of these small breweries as they start to grow and expand because what we found that’s kind of unique to this industry is once some of these breweries get a following it just their sales can skyrocket and the business can expand quickly to they may go from just serving a handful of beers and three or four nights to all of a sudden now they’re open six seven days a week and they’ve gone from just kegging beer to now putting it in cans so business income is absolutely a challenge for some of these folks especially the ones that see some substantial growth.

Jennifer Towne 8:21
Yeah, it’s got be hard for or harder for agents as well because it speaks to being really proactive with this group. I mean on one hand it’s a really exciting industry, really vibrant and growing rapidly but it sounds like you really have to be on top of the changes that are happening with that industry as well.

Chris Streeter 8:39
Yeah, you do and so yeah it’s a dynamic constant conversation that you want to be having with these breweries to make sure that they’re adequately covered and that they don’t have any gaps.

Jennifer Towne 8:50
So, are there any other unique insurance challenges that brewery can face beyond business income?

Chris Streeter 8:57
Yeah so beyond the business income is most of these breweries the equipment that is going to be installed within them is going to be unique and custom to them and what do I mean by that some folks are gonna say all right well steel tank is a steel tank and it was like can I just get down to the steel tank shop and purchase two or three of them and get up and running. What you find is most of the space that these breweries are moving into its custom space so you’re gonna need custom equipment that fits their space and so they’ll often go to a steel fabricator that will fabricate the tanks that are going to fit their space then you need to get them transported from wherever they were made to the brewery then there’s some unique challenges with often the openings in the building aren’t as big as the tanks themselves so sometimes you have to open up an outside wall move the tanks in and then close the building back up so it’s one thing to just go purchase the tank but there’s a lot of other expenses to getting them installed up and running.

Jennifer Towne 10:00
Yes, particularly if it’s a small brewery, I imagine it’s such a formative time in that business’s life is there anything that they can do to help mitigate or partially get back online during an interruption?

Chris Streeter 10:14
What I found with the brewery community is while it’s competitive it there’s a family nature to it so I’ve been fortunate enough and blessed enough that I’ve been in enough of these breweries and when you have say the brewery that opens up in a given town if there’s another brewery that’s interested in opening up a brewery down the street typically the one that was there first isn’t trying to push them out of their space it was just they’re more welcoming so to your point what can the breweries do partner with another one and so sometimes there’s reciprocal agreements because the thing that’s most near and dear to these folks is their recipes so once you get a good recipe with a good flavorful beer you can often take that recipe to a sister brewery or another competitor and say during some of your off time can I brew my beer with your equipment sometimes they may not have the capacity or the vessels to store the beer but if they can at least start some dialogue that you know if I ever have a problem or if you ever have a problem let’s kind of cover each other’s back and we’ll be able to keep both of our respective products going so that would be the biggest thing I would recommend that folks in this industry do is not only look for insurance coverage to make you whole again after last but do everything you can to mitigate your losses if should you ever have one.

Jennifer Towne 11:36
So that speaks to supply chain management too, so not only having the vendors in place but then also just assessing a business’s supply chain. Is there a way that our agents can help brewery customers evaluate their supply chain and possibly help them identify potential weak links or at least identify those vendors where they might not have a you know a recourse if something happens?

Chris Streeter 12:02
Yeah, so I think beyond just insurance being a good trusted advisor and valued risk management partner. From a supply chain perspective when I think of breweries you want to talk about the raw materials they’re using so whether it’s unique hops that there’s a limited availability to, certain grains the canning equipment that they use stuff of that. When you’re dealing with water you need to process it and get it clean so it was like figure out what they’re using for equipment to get water that they use to make the beer and then sometimes once you’re done brewing the beer you need to have the right wastewater facility to handle it. So supply chain not only talks about the raw materials coming in but once you process the beer and then you’ve got your outflow finished product just kind of understanding everything from the raw materials to who your final customers are is an important part of the conversation because not every brewery distributes to their customers the same way so he shared with you that some of these folks may be canning it some of it may be kegging it and cans typically you purchase because they’re disposable but kegs some of the breweries own the kegs some of them lease them and rent them so where are you getting those so they seem unique conversations and it’s just it’s while everybody loves beer or most people at least I do there’s just some fun unique insurance conversations to have around this business segment as well.

Jennifer Towne 13:35
Yeah, absolutely so let’s get into the beer aspect of course right so that’s our favorite part but there is consumption on site exposure, right? So can you talk a little bit about that and just some best practices that breweries should have in place maybe just some things that agents should be making sure they’re checking to make to ensure that they have a good risk management program?

Chris Streeter 13:59
Yeah I mean for liquor liability, TIPS training is paramount whenever you’ve got employees that are serving beer to their patrons. In TIPS training it’s one of those things that basically it’s training that allows the servers to assess when somebody has had too much or you may set certain proportions that it was like alright if there’s a two drink maximum, it was just like keeping track of which patrons have already had their two beers and not to serve them another one. So that’s important from a liquor liability perspective there’s all kinds of liabilities as premises liability associated with these brewery so you could be conducting tours you could have deliveries you could have other contractors working and fixing your equipment so just yet when you’ve got a constant flow of people in your space beyond just your employees your there’s going to be a significant premises liability associated with these facilities.

Jennifer Towne 14:56
Yeah absolutely I know some even hold events you know special events, and I’m sure there’s extra things to consider in that space. And speaking of events, I know breweries tend to be really involved in events where they travel, and they’ll go to brew festivals or other types of events, what type of exposures exists there? And what should they be looking out for?

Chris Streeter 15:18
Yeah. So when these brewers or the breweries end up going to these festivals, you want to find out who’s got the insurance for the festival. So often the festival have its own insurance, you want to be listed as an additional insured with those folks. And yeah, just making sure that you’re extending your coverages on your insurance policy extend beyond the premises that you’re operating at? If so, yeah, it’s very common for a lot of these breweries to be out and about a different festivals during the summer in the fall around here.

Jennifer Towne 15:51
So one thing that you often see at the festivals is not only the breweries, which are there to see, but also the food trucks. So they want to they want to give you beer, and then they want to feed you. And what we’ve noticed, and I know we’ve spoken about this offline as well, is that there’s been this wonderful partnership that’s emerged between breweries and food trucks. And can you talk a little bit about that, about that partnership, and then maybe also, again, just a little bit on the insurance exposure that can exist with those partnerships?

Chris Streeter 16:18
Yeah, what we’ve seen in the breweries that we’ve written to date is, I would say the majority of them do not want to be in the food business. They love beer, they do beer really well, and they want to stick to that. But the patrons also want to eat and it’s not a, it’s a good problem to have that they want to eat. It was like you don’t want somebody drinking on an empty stomach. But so some of the food, food trucks will be on insured brewery’s premises. So you want to make sure that you get good risk transfer there, you’re looking for certificates of insurance. Ironically, it’s provided a nice avenue for us to explore other potential or prospective customers, because the breweries typically have a close relationship with the food truck. And so you can kind of talk to them about what their coverage needs are. And we’ve even gotten to the point where we’ve created a food truck expansion endorsement so that when we have those opportunities to insure the food trucks, we’re able to provide the coverages that they need as well. So yeah, there’s some nice synergy there.

Jennifer Towne 17:23
Sounds like a topic for another podcast.

Chris Streeter 17:25

Jennifer Towne 17:28
So are there any other insurance coverages that our agents should consider offering to brewers beyond what we’ve discussed today?

Chris Streeter 17:39
Well ,most of these brewery so I shared with you my property background, we’ve gotten a little bit into the liability coverages that they’re going to also need. If you’ve got employees, you’re going to need some workers comp coverage. So a lot of the breweries will provide comp coverage. For those that are delivering their own product with their own vehicles, there’s going to be a potential auto exposure. So it’s an industry that has unique coverages or has coverage needs, both from property liability, workers confident auto perspective, as far as unique coverages go, contamination, maybe another, it’s one thing if all of a sudden they’ve had a fire if they’ve had a collapse tank or whatever. But one of the product offerings we do is if their product gets contaminated, that’s often picked up by the broad perils and property policy.

Jennifer Towne 18:29
So how can that happen?

Chris Streeter 18:32
So a lot of these, the initial cultures start in open areas so you can get some bad yeast that can happen. The other way the product sometimes gets contaminated is if the equipment wasn’t thoroughly cleaned. So if he ended up getting Yeah, while they were cleaning it, I’ll listen to some of the chemicals left behind, then you may have to discard a batch of beer. So yeah, making sure that everything is sanitized and cleaned and ready to accept a new batch of beer is important for these folks. But yeah, human error happens from time to time and you can end up with a contaminated batch of beer.

Jennifer Towne 19:12
So contamination, I would say an adjacency to contamination makes me think about foodborne illness even though I know we’re talking about Beer not food specifically, but is there a foodborne type illness exposure with beers where someone could get sick from drinking a contaminated beer?

Chris Streeter 19:27
I don’t hear that it somebody gets sick typically from a contaminated beer. But what’s unique about this industry is if should they have a contaminated batch of beer, they usually don’t like to get out into the public. So yeah, they’re quick to discard the batch of beer should something go wrong. But yeah, I would say if there’s a foodborne illness contamination, it’s probably from the food trucks or something like that, and probably less likely from the beer on some of these sites. I don’t want to say that the food trucks are going to get you sick, but yeah, should that exposure show up yeah that might be one area where you might see it.

Jennifer Towne 20:05
That’s good to know, Well, Chris, thanks so much for taking time to speak with us today about breweries and insurance. I learned a lot and I hope folks listening did as well in our next episode we’re going to talk to a brewery and hear from their perspective on the industry what they see as some of the challenges but then also some of the real opportunities that continue to exist for this vibrant group so please stay tuned and thank you very much for listening to Acadia Explains.

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