Winery owners who want to be sure their business is protected well into the future
would be wise to invest in risk management.
By Larry Chasin
Wineries navigate critical risks that threaten their operations on a regular basis. From wildfires to equipment breakdowns to changing inventory and property values caused by inflation, supply chain struggles and more, a winery’s risk profile today is fraught with potential challenges. Compounding these external factors, wineries are incredibly complex operations, often combining farming, manufacturing, hospitality and retail operations all on a single site. A loss, breakdown or interruption within any one of these aspects of the business could prove costly and even disastrous.
As we head into 2023, now is a good time for business owners to reflect on the year that was, consider the risk exposures facing their business and implement new measures to address them. Fortunately, these days, winery owners aren’t on their own when it comes to mitigating risk. Not only can their insurer help them understand how to identify and mitigate risk, winery owners can turn to technology to mitigate risk and help to ensure safe and uninterrupted operations.
Technology to consider
Whether you’re familiar with it or not, smart technology is easy to access and can greatly assist in limiting or preventing losses related to several major risk exposures. These smart tools include:
- Remote controlled sprinklers: Wildfires continue to plague the industry and, while sprinklers cannot ensure a property will remain untouched by fire, they can be a big help. With smart technology, staff can activate sprinklers from a distance to prevent damage and potentially limit the spread of fires. This can also be a valuable tool during growing seasons, as staff can remotely regulate sprinklers to ensure optimal water management on the property and confirm grapes and other vegetation are receiving adequate hydration at the right times.
- Smart equipment: Now, staff can regulate temperature control and shutoff valves on critical winery equipment from afar. This way, even when management is home for the day or out of the office, they can regularly check in on the property’s equipment and make sure everything is in order.
- Sensors: In the past few years, several wineries have deployed sensors for a wide range of purposes. These include heat sensors to monitor temperature across the property, light sensors and water sensors to track levels and their impact on vegetation and much more. With these sensors, wineries can keep a close eye on their property and ensure monitored levels don’t go past comfortable thresholds.
Through this new technology, winery owners and operators can do a better job of protecting their properties, curbing fire risk and preventing equipment breakdowns and shutdowns. For winery owners looking to improve their risk management efforts, investing in smart technology could be a prudent move. Working with an insurer that specializes in protecting wineries can take your risk mitigation plan a step further.
Finding the right partner
A specialty insurer with years of experience in the industry will have the knowledge and tools to help winery owners best protect their business. A good insurance partner will have access to its own smart technology as well, to help ensure the winery is covered no matter what may come its way. That technology could include:
- Drones: Drone cameras can be used to create models of structures and buildings on the property. These models can then be analyzed by the insurer to identify any potential exposures onsite. For larger wineries, drones can help ensure all structures have the coverage they need and put the scope and scale of the property into a manageable focus. This way, pumps, sheds, barns and other smaller parts of the property aren’t overlooked.
Drones also can offer an extensive look at vegetation on the property, which can help insurance specialists provide pointed recommendations about defensible space for wildfire protection. Some insurance specialists also use drones for telemetry to take accurate measurements of structures and assets across the property. These measurements help evaluate and ensure accuracy of building square footages, exterior tank sizes and volumes. Through drones and captured telemetry, insurers can even use oblique imagery and data to construct 3D models of structures to further evaluate finishing and construction to maximize accuracy of estimated replacement costs.
- 360-degree cameras: 360-degree cameras let insurance specialists build interior 3D modeling, stitch walkthrough imagery, measure square footage and provide comprehensive loss prevention analysis for winery owners.
• Catastrophe modeling: Catastrophe (CAT) modeling has been around since the 1980s but has grown significantly in the past few years. Most notably, risk assessment via CAT modeling has become much more accurate. Now, CAT modeling can run simulations at any specific location to give a likely representation of a potential CAT’s impact. The data pulled from the modeling can be used to understand risk exposures and confirm that a winery owner or operator has secured sufficient insurance coverage.
Prepare for the worst
All of these smart tools offer features that help insurers confirm their winery clients are adequately covered should the worst happen. Too often, winery owners file an insurance claim only to find they did not have coverage for something because it was not properly listed on their policy. Winery owners should work with their insurers to ensure correct square footage is reported and new equipment and new inventory is always included.
Incomplete or inaccurate reporting, combined with the rising material and inventory costs we’re currently experiencing, means many wineries could be primed for trouble. Not having coverage that incorporates adequate limits to repair and rebuild in today’s dollars can prove incredibly costly for winery owners.
Winery owners who want to be sure their business is protected well into the future would be wise to invest in risk management. By combining the knowledge and expertise of a specialty insurer with available technological innovation in risk management, winery owners can be confident their business is prepared to navigate any risk exposures headed their way.
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Larry Chasin
Larry Chasin is president and CEO of PAK Programs, which provides insurance programs for wineries, vineyards, breweries, wine & liquor retailers, cideries, meaderies, distilleries, liquor & wine importers and distributors. He can be reached at larryc@pakprograms.com.
