Are you protecting what you’ve worked so hard to build?
Picture it - clearing the fields, row mapping, proper drainage, all those plantings - and - your first yield. You have come so far to get to where you are today! Countless hours, lots of hard work and now you really have something - your pride and joy. But now that you’ve come so far and you’re more established, your risks are more significant and there is just so much more to lose. Are you proactively working to protect what you’ve worked so hard to build?
Winter is generally a quieter time and is a good time to identify potential risks that could pose a threat to your business. This can mean many different things to winemakers. For some this refers to risk management and insurance. Others don’t see the need for risk management because they don’t believe their business is very dangerous. And yet others see risk management as focusing on avoiding or eliminating all threats. This isn’t very realistic as it evades the many inherent desirable chances that must be taken to succeed in your business. As an experienced winery owner, you know you are presented with a unique blend of growing and evolving concerns – all of which have to be managed to varying degrees.
Risk management is a way to address the perils you face. You can do this by developing a practical plan to identify, deal with and minimize the adverse effects of the unexpected on your winery business, if or when it happens. In effect, risk management is about forward planning. You can start this forward planning for your own winery by looking inward and asking a few simple questions:
- “What could go wrong?”
- “Why are you worried about it?”
- “What will you do about it?’”
- “How will you pay for it?”
Now that spring is soon approaching and the frost is about to melt, it’s a good time to go through the process of asking these inward questions to help determine if your winery is ready for the busy season. Doing this will give you the comfort of knowing that you’re better prepared to protect all that you’ve worked so hard to build. Some of the areas you may want to review include:Your insurance program
Wineries are complex businesses that face a wide variety of risks ranging from crop damage, equipment breakdown, fire and even unanticipated incidents that could be financially devastating – just to mention a few. It is important that you insure all aspects of your business and work with your insurance agent to make sure you have the right coverage for all of the risks of your multifaceted and ever changing business. Changes in your exposures can include the addition of a new tasting room, adding prepared meals to a menu, a concert series or the addition of facility rentals for weddings and corporate events.
Going over your plans with your agent can help eliminate gaps in coverage. Coverages are available for a range of losses beyond traditional perils. These include covering wine leakage due to operator error, wine contamination and adulteration, and cyber liability. Also, don’t forget to find coverage for property damage to your trellis, grapevines and grapes. Do you have a wine cave? If so, ensure you are covered for below grade structures.
Updates to an auto schedule or drivers list should be reviewed, as well as the property and equipment limits. Note that while the buildings may appreciate in value, a lot of equipment general depreciates in value and should be adjusted regularly. Open communication with your agent about your operations is essential so that there are no surprises for you or them, when your insurance is called to respond.Good housekeeping
Take a good look around your premises. Is everything in order? Does it look spick-and-span? Keeping everything at your facility neat and orderly is essential. Maintaining an on-going focus on good housekeeping helps prevent fires and injuries to employees or guests. Routine housekeeping is a win-win scenario – it helps to reduce hazards and creates a well-organized work environment and a satisfying atmosphere. Check things now and have a plan that regularly monitors:Buildings and facilities
- Walks, steps, lawns, trees & shrubs, lighting
- Check that pallets, rubbish and firewood are stacked away from your buildings
- Traffic flow, security, lighting, cameras, pedestrians, weather
- Drains, gutters, downspouts, HVAC, age, flashing, access
- Weather, slip & fall, lighting, security, stairwells, egress
- Egress, ergonomics, storage, trips & falls, security, cyber risks
- Chemicals, other hazards, fire prevention, storage, age
You may be out looking for new equipment at the many upcoming trade shows. It is important that a qualified electrician has verified that your building electrical system is adequate for any new machinery or appliances. This is especially true in older or converted buildings.
Have you taken a close look at what you currently own? Clean your equipment to remove any dirt, grease or other buildup. Once clean, inspect for any needed repairs. Make sure your equipment is in working order. According to FEMA’s National Fire Data Center, electrical failures and malfunctions contributed to 21 percent of nonconfined nonresidential fires. Check for frayed, browned, or otherwise damaged electrical cords.
Make sure any machinery moving parts are properly guarded. Lubricate, polish, adjust, realign and calibrate individual parts so that you will get the performance you need during peak season. Your preparation efforts during these colder days will be time well-invested.Fire safety
Fire losses tend to be a major concern for wineries and a crucial safety issue for everyone in the business. By taking some precautions, you can better protect your premises and your employees will be better prepared if a fire starts. Some fire safety areas to review:Fire safety in rural areas
- Often result in larger losses because:
- Fires aren’t generally noticed as quickly
- Fire department response times can be longer
- Water supplies aren’t always adequate
- Road conditions may be less than ideal
- Talk with your local fire department:
- Do you have signage that can quickly direct emergency vehicles to your property?
- Can emergency response vehicles easily get to your facility?
- Do you have a sufficient water supply?
- Can the fire department easily gain access to this water supply?
- Unintended fires are more likely to happen during normal working hours
- Fire extinguishers are good first defense against these fires.
- Have your extinguishers been installed by an approved contractor?
- Have your employees been trained in their use?
- Are they mounted on approved brackets?
- Are they clearly marked, easy to locate and easily accessible?
- Do your employees regularly check them?
- Are they annually inspected by your approved contractor and serviced as needed?
- Knowing what to do in the event of an emergency is important to protecting people and property.
- Do you regularly conduct drills so that employees know what to do if you need to evacuate?
- Do you routinely check evacuations routes (exits, doors, exit paths, etc.) to make sure that there are no obstructions?
- Simply put, smoking can lead to fires.
- Do you have a smoking policy?
- Is this included in employee orientation?
- Are visitors given instructions when they sign-in?
- Have you clearly indicated designated smoking area(s)?
- Is there signage?
- Are smoking areas equipped with ash trays and fire extinguishers?
- Are they separated from burnable materials?
- It is very important that rubbish and wooden pallets are not stored against or near your buildings. If by chance a fire starts, these can accelerate the fire and threaten the safety or your building(s).
- To reduce your risk of these kinds of fires:
- Store these items away from your buildings
- Store trash in metal containers with self-closing lids
- Arrange for weekly trash service to reduce the amount of accumulation
How well is your safety program doing? A single claim has the potential to not only cause serious pain and suffering to one of your employees, it could also seriously impact your business financially. How often do safety incidents arise on your premises? How have you dealt with them in the past? Have you been successful? What regulations are applicable?
Your safety and health program is an important aspect of your business. Protecting your workers is important to your winery. Make sure you have a written safety program and write it so that it is easy for everyone to understand. Did you include?
- New employee / job orientation and on-going training
- Routine inspections to insure hazards / unsafe practices are identified
- Investigations of incidents to make sure they don’t happen again
- Procedures in writing so your workers know how to safely perform the tasks expected of them
- Regular meetings to discuss safety concerns – your workers need to know safety is important
- Safety Data Sheets for any hazardous chemicals and training for proper use of those chemicals
- First aid provisions to effectively treat individuals
- Personal protective equipment as needed with the training to use it properly
- Emergency response procedures to address issues such as fires, chemical spills, explosions or natural disasters so that your employees know how to effectively respond
Protecting your workers is vital to the success of your operations; now is a great time to make sure your safety program is up to this task.Security
Security in your winery is also an important consideration. Whether big or small, your winery should be secure. It can help deter sabotage, unlawful entry and protect your physical assets when your facility is unoccupied. Security can also provide a safer environment for your employees. Early intruder detection discourages burglary and destruction and permits an organized and rapid response when your system is activated. To best achieve early detection of an intruder, consider installing a combination of recognition devices all through your facility. A number of varied sensors are possible:
- Sensors that detect vibrations
- Sensors that detect broken glass
- Sensors that detect movement
- Sensors connected to doors and windows and detect unauthorized openings
Some other security questions to ask yourself:
- Do you have security guards or video monitors?
- Do you have secure locks on doors and windows?
- Are your valuables stored in a high quality, leading brand safe?
- Is your safe securely and permanently attached to your building?
It is important to work with someone trained in the careful selection and configuration of security and detection devices suited to your needs and physical setting. Configuring all of these devices into a coordinated control panel will help enhance your system’s ability to detect intruders and minimize unwarranted false alarms.Summary
Many winery operators are not aware of the many risks within their business and the impact they could have on their ability to stay in business. By taking some time before the busy season begins, you can better protect your operations and be more prepared to address many of the concerns associated with wineries.
*Markel Specialty is a business division of Markel Service, Incorporated, the underwriting manager for the Markel affiliated insurance companies.