Jump to content

Search the Community

Showing results for tags 'bonding'.



More search options

  • Search By Tags

    Type tags separated by commas.
  • Search By Author

Content Type


Forums

  • Terms & Forum Business
    • Terms of Service for ADI Forum Users
    • Forum Business
  • Welcome, ADI News & General
    • Welcome & Introduce Yourself
    • ADI News & Events
    • Beginners
    • General Discussion
    • Speakeasy
  • Producing Product
    • Equipment
    • Packaging
    • Technique
    • Safety
    • Slow Distillation
  • Spirit Specific
    • Vodka
    • Whiskey
    • Gin
    • Rum
    • Absinthe (and other herbals)
    • Brandy
    • Distilled Spirit Specialty
  • Selling Your Product
    • Sales & Marketing
    • Distribution
    • Distillery Tasting Room
  • Government & Guilds
    • Federal Gov't
    • State
    • Local Issues
    • State Distillers Guilds
    • Canada
  • Marketplace
    • For Sale - Peer to Peer
    • For Sale by Vendors
    • Wanted To Buy
    • Marketplace Archive
  • Career
    • Help Wanted
    • Job Wanted
    • Business Opportunities

Categories

There are no results to display.

Blogs

  • Scott @ Twenty2Vodka's HighProofSpirit Infusing Blog
  • emutch's Blog
  • mitchabate's Blog
  • EZdrinking
  • Self Distribution
  • Luwest's Blog
  • Black Water Barrels

Product Groups

There are no results to display.


Find results in...

Find results that contain...


Date Created

  • Start

    End


Last Updated

  • Start

    End


Filter by number of...

Joined

  • Start

    End


Group


AIM


MSN


Website URL


ICQ


Yahoo


Jabber


Skype


Location


Interests

Found 14 results

  1. Happy Tuesday Dear Readers, Ah … Spring time in the Rockies! 50 degrees one day, Blizzard warning and cancelled everything and road closures the next. I will say though, that it beats Minnesota (right @Skaalvenn), where you enter winter and negative degrees, and it stays there for 5 months!!!! At least here, in Sheridanopolis, you do get those 50-degree days followed by blizzard warnings. BUT AT LEAST YOU GET THOSE 50 DEGREE DAY REPRIEVES. Enough about the weather, what am I, some 90 year old rancher, talking about the weather. “Looks like weather’s comin’!” Isn’t it always!??!?!?!?! In today's installment of the “Tidbit”, I am going to keep this short and sweet, and not like I do when I say that and then go on ad nauseum for pages on end. This one will be short … ish 😊. Today I am inviting all of you to please come and visit me at booth 434 in Denver next week. As well, I have to tell you, BIG THINGS ARE HAPPENING!!!!! And when I say big things, I mean BIG THINGS. Although I will be at the expo next week and may not have a chance to post here (although I might, but really, with all the fun and frivolity that occurs at the expo it is doubtful), it is my anticipation that upon my return I am going to have some seriously amazing news for all of you here on the forums. With that said, I will be on hiatus for a week or two as I will be out of the country for a period. Even superhero’s such as I, InsuranceMan 2.0, need the occasional break. Insurance-superhero-ing is a full-time gig, 24/7, and occasionally you just gotta get away, as the great Lenny Kravitz has sung. Please stay tuned, dear reader, as I will be forthcoming with some pretty exciting news that is certain to turn the distillery insurance world on it’s head, and be beneficial for everyone. Until then, dear reader …. Stay Vigilant, Aaron Linden a.k.a InsuranceMan 2.0 307-752-5961 Insuranceman2.0@yahoo.com
  2. Good Morning Dear Readers, In today’s installment of the “Tidbit”, I wanted to touch upon bonding since it has been something that many folks have asked me about recently. I know, I know, bonding for the most part for many of you has been a non-factor in the recent years … OR HAS IT!??!?!! Dun-duh-daaaaah!!!!!!!!!! I wrote a little posting here a while back about bonding and the fact that the Fed’s never really, clearly defined the new Federal Excise Tax’s (FET’s for those of us in “the know”) reduction, and whether or not you should carry a bond. At the time that they passed the “Tax Reform” bill, Congress only spoke about the removal (or withdrawal) of tax paid spirits. They did not address the potential need for a bond to be held on the stock that is aging, in process, bottled, or bulk spirits (we will just refer to all of these as “stored spirits” from this point forward). There was a bit of debate between forum-goers as to if the “stored spirits” could ever have a need for taxes to be paid in the case of theft, destruction, etc. Addressed in the Code of Federal Regulations (CFR’s); Title 27; Subchapter A; Part 19 – Distilled Spirits Plants; §19.262 General requirements for filing claims - §19.268 the reasoning, ability, and what may happen is discussed in case you feel like reading it … or if you need a nap. Anyway, there is a possibility that “stored sprits” could have the taxes called for by the Fed’s, in which case a bond would or could come in very handy. I will leave that up to you to decide. Really though, the heart of the matter and a question I get asked a lot is, “What is a surety bond for FET’s, do I need it, how does it work, and what about state bonding???!!?!” Well, InsuranceMan 2.0 is here to tell you. What is a surety bond? Well, basically a bond is a legal agreement between entities (in this case the distillery and the governing body) that guarantees that in the case of taxes needing to be paid, that they will be paid, either by the distillery (Indemnitee), or in the case that they cannot make the payment, the surety company (Indemnitor) is obligated to make the payment on behalf of the distillery. In short, if you don’t have the money to pay the taxes, the surety company will make the payment for you to get the government off your back. Sounds like a sweet deal, right? Not so quick! In the case that the indemnitor was to make a payment for you, yes, it satisfies the government by making them whole, but your obligation does not stop there. If the indemnitor has laid out money on your behalf, they are going to want to make up that loss somehow, and that now once again becomes your problem. A guy named “Guido” may show up to your door demanding payment, and “take your knees” if you can’t come up with the money. Actually, that probably isn’t going to happen … Probably. More likely, the surety company would ask you nicely for the money at first, but after that things could get icky. They may sue you over the lost funds, slap an injunction on you and your business (because you do sign the agreement as an individual and on behalf of your entity, if you have one) and make you liquidate assets until the loss is paid in full. Sounds kind of scary, huh? In reality, not really. If you think about this, when are most taxes due? When the product is withdrawn from you bonded premise. Generally that would mean, if you are removing product, chances are the reason is because they were sold, in which case that means that you have the money to pay the taxes on said withdrawn spirits. So really, the surety bond is just a formal agreement, a placeholder, to make the governmental body feel all warm and fuzzy and sleep better at night knowing that they are going to be paid no matter what. I personally have never seen a bond called on anyone that I work with, but I have heard of it in the case of loss/destroyed product (at which there may be a reduced rate on taxes due), or in the case that a distillery has become insolvent (again, thank goodness I have not had anyone with that issue). In any case, even though there is debate as to if you should carry a bond or not, a bond could be very nice to have should the unforeseen ever happen. Just an FYI, a Federal TTB DSP bond is broken into two parts, and this is what was never really addressed. There is the “Operations” side of the bond, and the “Withdrawal”. The operations side contemplates spirits that are “bulk, bottled, or in process”, so again, the “stored spirits”. This is the section that the Fed’s never spoke about or addressed in the tax reform. Then there is the “withdrawal” side that contemplates the taxes needing to be paid when the spirits are removed from you premises. This is the ONLY part that they concerned themselves with. Again, you can see how with this being the case, there may still be need for a bond at this time and place. Based on this recent tax reform, however, as illustrated, the Fed’s really are only concerned with the withdrawal side of things, and they lowered the taxes due from the historic $13.50 rate per proof gallon (100 proof, or 50% ABV) down to $2.70 per the same. A little aside here, the REAL tax rate for many was actually $10.80 since most product for many going out the door was 80 proof (or 40% ABV), which then made the tax rate $10.80 per proof gallon. Just wanted to share that little nerdy bit of knowledge with you. So, what the heck does this all mean?!?!?!? Well, it is too soon to say what Congress will do in the future, but the current FET reduction is due to sunset on December 31st, 2019. In the tax reform document, it states the following: PART IX—OTHER PROVISIONS Subpart A—Craft Beverage Modernization and Tax Reform SEC. 13801. PRODUCTION PERIOD FOR BEER, WINE, AND DISTILLED SPIRITS. (a) IN GENERAL.—Section 263A(f) is amended— (4) EXEMPTION FOR AGING PROCESS OF BEER, WINE, AND DISTILLED SPIRITS.— ‘(B) TERMINATION.—This paragraph shall not apply to interest costs paid or accrued after December 31, 2019. H. R. 1—123 SEC. 13807. REDUCED RATE OF EXCISE TAX ON CERTAIN DISTILLED SPIRITS. ‘(1) IN GENERAL.—In the case of a distilled spirits operation, the otherwise applicable tax rate under subsection (a)(1) shall be— (A) $2.70 per proof gallon on the first 100,000 proof gallons of distilled spirits, and (B) $13.34 per proof gallon on the first 22,130,000 of proof gallons of distilled spirits to which subparagraph (A) does not apply, which have been distilled or processed by such operation and removed during the calendar year for consumption or sale, or which have been imported by the importer into the United States during the calendar year. So again, what does this all mean?!?!?!! It means that currently we are enjoying a bit of a reprieve in regards to the amount of taxes that are to be paid on withdrawn spirits, which is super nice! It leaves more money in your pockets and that is always a good thing. It also means that come the end of this year it could all go away. Maybe it will be voted to remain the same, that would be awesome! Or, it could potentially even go up to or above the historic levels that it was at. Truth be told, we have no idea what is going to happen. One thing is for sure though, many, if not all states, require some type of surety bonding at a state level. Whether it is a “sales and use tax” bond, an “alcoholic beverage manufacturer” bond, or something else, there is probably still a bonding need for your distillery. I, InsuranceMan 2.0 am here to assist you. I can and have provided hundreds of bonds for distilleries across this great land, and I actually have the lowest bonding premiums of anyone in the country. So, if you have a bond and feel as though you are paying too much, or if you have a question about if you should get a bond or not, or if you are a new distillery and found out you do have a state bonding need, I am here to assist you. Maybe you are nearing that 100,000 gallons of withdrawn product and getting nervous as to when the right time to get a bond may be. Again, I am here to help. Give me a call, shoot me an email, text me, hit me up on a PM here on the forums, come see me at booth 434 in Denver in a few weeks, or send a smoke signal. Whatever you need, I am here to answer all of your deepest, darkest insurance and bonding questions. Until next time my friends … Stay Vigilant, Aaron Linden a.k.a. InsuranceMan 2.0 307-752-5961 Insuranceman2.0@yahoo.com
  3. Good Morning Fine Citizens of ADI-land!!!!!!!!!! It is a lovely, but a bit cold, day in Sheridanopolis. I hope wherever you are, you are toasty warm whilst reading this informative installment of “The Tidbit”. Today we are going to look at a coverage that is as important as any that you can purchase, LIQUOR LIABILITY. First of all, let me explain the definition of Liquor Liability. According to the “Insurance Information Institute (I.I.I.)”, Liquor Liability insurance is defined as coverage for bodily injury or property damage caused by an intoxicated person who was served liquor by the policyholder. Wait … WHAT?!?!?! Just by serving someone liquor, you can be sued?!?!?! ABSOLUTELY!!!!! Liquor Liability coverage is essential coverage to have if you are in the business of alcohol, any type of alcohol! If you produce it, sell it, give samples of it, you better have it! This is especially true in states that have adopted any kind of Dram Shop Act/Law. OK, what is a Dram Shop Act/Law???? I am so glad you asked! A Dram Shop Law/Act is a statute which makes a business that sells alcoholic drinks, or a host who serves liquor to a patron who is or appears to be intoxicated, or close to it, strictly liable to anyone injured by the patron, including the patron. Did you know that currently the only states in the US that have not adopted any kind of dram shop law are: Delaware, Kansas, Louisiana, Maryland, Nebraska, Nevada, South Dakota, and Virginia? Every other state has a Dram Shop Act/Law on the books. So, does that mean if you are in any of those states you don’t have to worry about Liquor Liability? NO! Often times, these states still allow for prosecution regardless of if this law was in place. As well, personal injury attorneys rarely care in the case of a lawsuit, and they will come after you. Even if the intoxicated person injures someone else, or themselves, crashes their car into someone or something, or even if they go home and beat up the neighbor or significant other, you could potentially be sued. “But InsuranceMan2.0, we only give away a total of four, quarter ounce samples!!!! That cannot get someone drunk!!!!!” Ah, excellent point dear reader, however … You may not have known the patron was at three other establishments before wandering in for a lovely sample of your wears. Or, perhaps they just slammed a fifth in the parking lot and then came in to have a taste, or get a cocktail (did a little pre-game warm up as it were), and it had not hit them prior to them coming in. Whatever the situation, if you have served them you could have potential problems. Case in point, I work with an establishment that is in the business of selling alcoholic drinks. They are in the business of selling A LOT of alcoholic drinks. In fact, they are the largest bar in a state that I shall not name. A patron came in at 11 a.m. for a Jager Bomb (I’m not judging), paid for the drink with their debit card, and went on their way. Fast forward to 3 p.m. when this gal went to her child’s daycare, retrieved her child, and proceeded to drive through the wall of the daycare. Yeap, true story. Sad but true story. As it turns out, the establishment that I represent was not the first stop of this gal’s morning, nor was it the last. At each place she stopped, she had at least one Jager Bomb, paid for it with her debit card, and moved on. In the lawsuit that ensued, her paper-trail of where she had been and the drinks she consumed was easy to establish since they all were transacted through her bank statement because of the debit card. Her lawyer then named each of the 8 establishments in the lawsuit citing that they each in someway contributed to her intoxication. Guess what, all 8 of them were successfully sued, and had to split the penalty 8 ways. I am not saying that this is ever going to be a situation that you may be involved in, but I will tell you that if you don’t have liquor liability coverage then you don’t have liquor liability coverage. Liquor liability coverage is almost always excluded under your general liability coverage if you are in the business of selling or profiting from alcohol, period. So, without purchasing a separate liquor liability coverage, you have no coverage. That means that any suit and resulting claim would come out of your own personal pocket, or that of your business. Either way, that is not good. Furthermore, an often-overlooked aspect both General Liability and Liquor Liability is the fact that they both provide for defense coverage. Yessir! If you are sued, no matter if it is a real case of negligence, or a frivolous lawsuit, your policy provides for the cost of defense. Yeah, Buddy! I have seen people sue over the craziest of things. Things that have no validity what-so-ever. I don’t know if you have hired an attorney lately, but the prices are not going down! Even in the case of a frivolous lawsuit, it could cost you tens of thousands of dollars to prove your innocence. Better that money and the crack staff of attorneys comes out of the insurance carriers’ pocket as opposed to yours. The long and the short of it is this … Liquor Liability is something you should have, you need to have, and something that you should want to have. Pair this with making sure that you and all the servers are TIPS trained, and you should have very little to worry about. Heck, most carriers only charge between $750 and $1,000 a year for a standard liquor liability policy. That would barely get you 2-3 hours of a lawyer’s time! Of course, that pricing can be impacted by various factors such as a full-blown cocktail room that is selling $1.2 million a year, but for a normal tasting room that is either giving out free samples, or making a decent profit from tasting charges, it should not cost you more than that. And for that $750 - $1,000 you have the piece of mind of knowing if you are sued due to a liquor situation, you have $1,000,000 worth of coverage to take care of any claim, defense costs, and crack staff of lawyers. Now, that is something that should make you sleep better at night. Until next time my friends, STAY VIGILANT, Aaron Linden a.k.a. InsuranceMan2.0 InsuranceMan2.0@yahoo.com 307-752-5961
  4. Good Day Fellow ADI’ers, Yes, today’s “Tuesday Morning Insurance Tidbit” is being brought to you on Wednesday. As the holidays approach at a fast pace, sometimes InsuranceMan 2.0 becomes a bit busier than normal! Besides the normal day-to-day business of keeping a vigilant and watchful eye out over all of you, to the ongoing battle of fighting insurance injustices far and wide, to getting ready for the holidays, even I, with my incredible superpowers, sometimes cannot keep up with it all. Kudos to all mortals out there who keep on keeping on during this time and stay up to date on their tasks at hand. I applaud you, you are the true superheroes here! Now, on to today’s Tuesday Morning Insurance Tidbit! This tidbit will be short and sweet … You’re welcome! The topic at hand is … Da Da Daaahhhhhhh ….. “State Bonds”! It used to be that all distilleries needed to have a Federal bond, also known as a TTB Bond. As you are all aware however, that requisite went away here about a year ago, and is set to continue until the end of 2019, at which point the Government will make a decision as to whether or not to continue this exemption or re-implement it. Until then however, many states still have bonding requirements. From “Sales and Use” bond requirements, to “Alcoholic Beverage” surety, to “ABC/1-2-3/3-Tier” bonds, most states are going to require some type of bonding from your distillery. Also, keep in mind, that if you are looking to expand your territory from your home state to other states, you will most likely be required to provide a state bond to the new state you are going to conduct business in. Does bonding scare you?!?!? Does it keep you up at night and haunt your dreams?!?!?!?! Do you find yourself breaking out in a cold sweat when you nervously contemplate how difficult it is going to be to get a bond?!?!?!? Do you wonder if they will want all your most personal and private information or take your first born or your still as collateral?!??!?! Well, have no fear … InsuranceMan 2.0 is here!!!!!!!!!!! I can assist you with all of your state bonding needs (as well as your Federal TTB bonding as well, if you are withdrawing more than $50,000 in tax paid spirits a year). I have this down to such a science that all we really need is your name, address, bond amount and state, and I can have the bond done, issued, and out to you within an hour. Bada-Boom! Yes, you heard me correctly, in less than an hour. Many of the state bonds, or sales and use bonds require a limit of anywhere from $1,000 to $5,000. For bonds such as these, not only can you have them in an hour’s time, but they only cost an annual premium of around $100. Yes, you read that correctly, $100. Again, you are welcome! So, if you are uncertain of the state surety you surely and certainly seek, seek surety no further than the simple certainty I can surely provide for your surety needs. Until next time, dear reader … Stay Vigilant, Aaron Linden Aka InsuranceMan 2.0 307-752-5961 InsuranceMan2.0@yahoo.com
  5. Happy Tuesday to all my ADI friends!!!!!! In today’s riveting installment of the “Tuesday Morning Insurance Tidbit” direct from my secrete lair in Sheridanopolis, we are going to unmask the insurance supervillain that is Actual Cash Valuation vs. Replacement Cost Valuation 😊 Most people, when looking at their insurance policy (If they even do. Did you know that surprisingly, over 65% of people in a HuffPost survey said they have never looked at their insurance coverage in detail!??!!?!?!?) wonder what in the multiverse these terms even are?!?!?!?!?!? WELL HAVE NO FEAR, INSURANCEMAN 2.0 IS HERE!!!!!!!!!!!!!!!!!!!!! The reality of this is you need to look at your policies people! You need to know what you are covered for, and what you are not. Furthermore, you need to know what to expect in the case of a loss in the way of valuation. That is, unless you are working with InsuranceMan 2.0. If you are, then I explain everything to you upfront and in detail. Let us start with Actual Cash Value (a.k.a ACV). ACV actually appears on more policies then I care to talk about. For starters, it is a cheaper type of coverage (so this is a bit of wicked trickery some agents may use in order to get you a lower premium if they are trying to woo you away from another agent! Watch out for these Evil-doers!!!!!!) So, what is it exactly?!?!?! That is a tough one to define, my friends. In some instances, when adjudicated in the court system, it has been defined as a “fair Market Valuation” which means, what would someone reasonably pay for the same used, depreciated item. This is a slippery slope indeed, because who is to say what someone is willing to pay. Beauty is in the eye of the beholder and all. In most instances (like almost all of them, and the way the insurance companies define it is) it means the cost to replace the damaged item with like kind and quality MINUS depreciation. Did you get that?!?!?!?! MINUS DEPRECIATION!!!!!! So that still you purchased back 5 years ago for $80,000 that you have run countless batches through, and now it has that cool patina and so much sentimental value (after all, it has been with you like an old friend. You know its nuances, what makes it run well, what it does not like, etc.), could be depreciated by … pick a number. I say, “pick a number” because you just do not know. Insurance companies have depreciation schedules for all types of items, but it varies depending on what it is, size, condition, etc. So, it could be maybe 6% a year, or as high as 20%. You won’t necessarily know until the unforeseeable strikes. Given the example outlined above, for ease of math sake, let’s say that same still in today's market still costs $80,000 (the replacement cost of the item). If you have an ACV clause on your policy and the depreciation is on the low end of 6%, then it would equate to the cost of the replacement item, minus depreciation, multiplied by the number of years. So, in this example it would be 6% multiplied by $80,000 replacement value, multiplied by the 5 years you have owned/operated the still. Given this example it would look something like this, .06 *$80,000 * 5 years = $24,000 in depreciation. So, $80,000 - $24,000 = $56,000 in value after depreciation. Well dear reader, that leaves you in a jackpot of having to come up with $24,000 to replace your $80,000 still. If you are facing a depreciation that is much higher, like the 20% example given, then you would be looking at complete and total loss and you would have no coverage for your damaged still!!!!!!!!!!! As I have said so many times before, NO BUENO!!!! Also, keep in mind that this does not even take into account your deductible. If you have a higher deductible, like a $2,500 or $5,000 deductible amount, then it would reduce your coverage even more, leaving you with more out of pocket expense. Again, the use of higher deductibles are definitely something in the bag-o-tricks of the Evil-doers that they may use to trick you into thinking they can offer you a lower premium. Be ever vigilant and watch for these injustices! Now, if you have a Replacement Cost Valuation (RCV) clause on your policy, ah ……. This is as close to Nirvana as you can get. Not the Kurt Cobain band mind you, rather the Buddhist belief of a transcendent state in which there is neither suffering, desire, nor sense of self, and the subject is released from the effects of karma and the cycle of death and rebirth. It represents the final goal of Buddhism, in case you were wondering. So, what is this magical RCV of which I speak? Well, let me tell you … RCV, simply stated is the cost to replace the damaged item with like kind and quality, period. With RCV, the insurer does not care if your still is 5 years old or that you have run countless batches through it. They will replace it with like kind and quality, and in our example above, that was the full $80,000. Wait, what?!?!?!? “Are you telling me that the insurance company will give me $80,000 to replace my $80,000 still if I have RCV on my policy?!??!?!” Yes, yes I am … however, keep in mind there is a deductible. So, if you have a $1,000 deductible, you will actually get $79,000. Still (pun intended), that is a whole heckuva lot better than anything in the ACV example given! “What if the example given above is wrong and the still is now only $60,000 to replace, do I get to keep the extra $20,000 in value?!?!?!” Um …. N O !!!!! With RCV, it is paying to replace it with like kind and quality, so if the insurer can find the same still in today's marketplace and replace it for $60,000 then that is what you will get, a new still of like kind and quality. The idea of insurance is to make you whole again after a loss, not benefit you and give you additional money. Don’t be greedy fine citizens, you recieved your same still back after all! Well, with that I hope I have assisted in tearing away the scary mask of ACV vs. RCV so that you can sleep easier at night knowing the difference. Or at least knowing I am ever-watching and here to protect you. Now I am off to continue my daily fight against insurance injustice, and the pursuit of insurance education of the fine citizens of this land! As always, if you have questions about your insurance coverage’s that you already have in place, or if you are looking to start a new facility, I am only one call away. Just flick on the InsuranceMan 2.0 beacon and I will come to your rescue. PM me, shoot me a text, or give me a call @ 307-752-5961. Or send me an ultra-super-secretive-coded-encrypted-message via the magical super-web at InsuranceMan2.0@yahoo.com . Until Next Time My Friends, Stay Vigilant!!!!!!! Aaron Linden a.k.a InsuranceMan 2.0
  6. Happy Tuesday Morning!!!!!!! As you may have noticed, there was not an installment in the Tuesday Morning Insurance Tidbit due to my family coming to Sheridanopolis for Thanksgiving and the hectic schedule that brings with all that involves. I do truly hope that you and your families had an amazing holiday, enjoyed good company, good conversation, and of course … good spirits!!!!!!! In todays installment of the “Tidbit”, I am going to change things up a little bit. Instead of me picking a topic and writing about it, I thought it may be interesting to open up the “Tidbit” to the forum so that you can ask questions that you may have about anything related to insurance, bonding, etc. I get a lot of great questions over the phone and in private emails, but I though maybe it would be fun to have others post their questions here in order to help everyone gain a better understanding. Remember, there are no silly questions, and if you are thinking about asking one, you can rest assured there are many others that likely have the same question. So, with all that being said, let’s get this party started!!!!! Once you post a question, I will answer it by starting off with the “@USERNAME” so that you get a notification that it has been answered. I truly look forward to all your questions, and I hope that this post actually carriers on for many weeks or months yet to come. It really can morph into an “ask the insurance expert” type of situation. Who wants to be first!??!!?!?!?! Stay Vigilant, Aaron Linden a.k.a. InsuranceMan 2.0 307-752-5961
  7. Dear ADI Forum Members, I wanted to let everyone know that over the weekend my iPhone had a major malfunction and is currently not operating. Apple has been amazing and they are getting a new one to me as fast as they can. However, in the meantime, I do not have access to retrieve any voicemails left at my 307-752-5961 number. If you have recently left me a voicemail on my cell phone please also give me a call at the office at 307-673-2496 (or toll free at 1-800-300-4370), or send me an email at aaron.linden@hubinternational.com . Also, do yourselves a favor out there ....... if you rely heavily on your phone and technology, PLEASE back up your files and have a secondary access point. I remember the day when I knew the phone number for everyone that I would call, and know I don't know any of them. Siri is a great assistant, until she is not there anymore!!!!!!!!! LOL!!!!!
  8. HEEEEEEELLLLLLLLLLLLOOOOOOOOOOOOOOOOO A D I !!!! I'M BACK!!!!!!!!!!!!!!!!!!!!! First and foremost, I want to thank all of you for the phone calls and emails checking in on me and my whereabouts over the last several months, it means the world to me to know how much you all care. Second, I want to say hello to all my old friends here, and a special shout out to those of you whom I have not yet had a chance to meet or speak with. I look forward to hearing from all of you and working with you. Yes, like a phoenix rising from the ashes, InsuranceMan (my previous handle here on the fantastic ADI Forums, I encourage you to look up my postings. They are pretty good if I do say so myself) has transformed into InsuranceMan 2.0 and it is not just in name, but in so very many other ways. I still am the industry expert when it comes to all things distillery insurance related, but now I have the ability, flexibility, agility, and so many other "ilities" to assist you in so many ways that it will make your head spin! So, without much further ado, let's get this party started!!!!!!!!! I am here, ready, willing, and wanting to work with all of you in regards to your insurance needs. As you may already know, if you have read my past postings, I have 16 years of insurance industry experience and over 7 years of expertise in very specialized distillery insurance programs. No one else in the country can say the same! And I am not tooting my own horn here, you can ask around, there is no one that knows this industry like I do. I have gone grain to glass at 4 different distilleries and understand your needs from your side of things. Partner that with the expertise I have in the insurance world, and the fact that I work with hundreds of distilleries across the country, and well friend, you have a winning combo! Oh yeah, and the fact that I do it better and cheaper than anyone else is kind of a nice notch in the belt as well. Well, what are you waiting for?!!??!??! You know you want to call me, so DO IT!!!!!!! Oh, yes, you need my phone number. Maybe that is what was holding you up. Well, it is the same as it has always been. Here it is again though, in case you don't have it already. 307-752-5961 OK, now what are you waiting for? I answer my own phone, give you as much advice as you can handle, and answer all of your questions, all you have to do is call. Again, I look forward to speaking to all of you and getting to know you better. Best, Aaron Linden 307-752-5961
  9. Good Day ADI Forum Members, I wanted to do a post today in regards to the new regulations that have taken effect in regards to the PATH Act and the new lower FET rates that have been implemented and how that may affect your need for a bond. This seems to be a hot topic currently so I thought I would address a few issues here. As you all are aware, the PATH Act and the lower FET rates have kicked into effect for the next two years, and there are many of you that are super excited to cancel or terminate your current DSP bond. Well, let’s just hold on a second and think about what these new changes really mean. In the PATH Act, it was determined that any distillery that has less than $50,000 worth of taxable withdrawal in a year’s time no longer is subject to a bond requirement. Then, the new legislation has gone ahead and lowered the FET from $13.50 per proof gallon down to $2.70. That is wonderful, and a boon for distilleries that will allow for growth, capital investment, the hiring of staff, etc. Both the PATH Act and the reduction of the FET’s are fantastic ……………… HOWEVER ………….. The only item that was really contemplated in the PATH Act was the "Withdrawal" amount; the act never specifically said anything about the operations side of the bond. The operations side of the bond is comprised of the "Distiller / Warehouseman / Processor" portion. This portion of the bond covers for items that you have on hand that is either bottled, in process, being held in totes, or aging/maturing on site. In fact, ALL distilleries still have this exposure being that everyone has product on site in one fashion or another, and many of you have a considerable amount of product warehoused at your facilities. Think about this, if for some reason your product on hand were to be lost, stolen, or hijacked the government could still charge the full amount of taxation that would have been due. Yes, the Federal Government reserves the right to still collect the taxation that WOULD have been collected on that product! Sure, there is a repeal process that you could potentially go through to have the taxation abated or forgiven, but there is no guarantee that the TTB would waive these charges, it is done on a case by case basis. In some instances, the taxes may be due upfront until the repeal process can go through the proper channels, and that process can take a while. Although these situations are rare, they can happen. It is also rare for distilleries to blow up or burn to the ground, but that does not mean that you should not carry insurance. For this reason alone, it may be beneficial to keep your bond in place. If a situation such as this were to occur, and you have cancelled your bond, you would have to come up with the cash to pay for the taxation of the lost product. That could certainly become an issue and cause a lot of heartburn in an already stressful situation. In most cases your federal TTB bond should not be costing you more than a few hundred dollars a year, and that is fairly cheap for your piece of mind. As well, the reduced FET’s are only certain for 2018 and 2019, after that, who knows. It could be determined that the rate will go back to $13.50 or even higher, we don’t know, maybe they will leave it alone forever, God willing. Another potential reason to keep an active bond may be that it is easier to increase an already existing bond than it is to go through the entire bonding process again when you get to a point that you have to have one. If you have a history with a surety company of having a bond in place, it is a fairly easy process to issue a superseding bond to increase the amount needed. If you cancel your current bond, and for some reason your financials are not as strong in the future, obtaining a bond for a higher amount (Operation plus your need for over $50,000 in withdrawal) could be difficult. I do want to be clear, I am not trying to be a “fear-monger”, whether you keep your bond in place or not is a personal preference and I would never "twist" someones arm to keep a bond in place if they did not see the need to have one. I just want to make certain that people are educated in this arena prior to making a decision that could potentially have a severe impact on the businesses you all have worked so hard to build. Also, please keep in mind that having a bond in place is not “free money”. By that I mean, as owner of the bond you are indemnifying yourself to the surety. This means that if the surety has to make payment on your behalf, the surety will make every attempt to collect the funds that they paid out to the TTB. They can seize assets of the distillery, your personal assets, etc. The bond is simply there to make payment on your behalf if you cannot at that time. Sooner or later you will have to reconcile with the surety. If you don’t have a bond in place, you will be reconciling with the government. Either way, eventually you will be paying someone back! The long and the short of it is, just because the taxation rate is less for the next two years, and just because you may not hit $50,000 in withdrawal, you may be money ahead to keep your bond in place, especially in regards to the operations side of things. Just "booze for thought".
  10. Happy 11/11 everyone!!! It has been a little while since I have posted anything new here on the forums and I thank you all for that based on the fact that ADI members have been keeping me VERY busy with insurance and bonding needs. Speaking of bonds, what a segue into the hot topic of the day. On 11/7/17 the TTB released new information in regards to the "Information for Alcohol Excise Taxpayers and Applicants for Permits and Brewers’ Notices Regarding Internal Revenue Code Amendments Affecting Excise Tax Due Dates and Bond Requirements". Specifically they cite the "Protecting Americans from Tax Hikes Act of 2015 (“the PATH Act”) (Public Law 114-113). Section 332 of the PATH Act amends the Internal Revenue Code of 1986 (IRC) to change excise tax due dates and remove bond requirements for certain eligible taxpayers (see 26 U.S.C. 5061 and 5551)." Are you sleeping yet? Still with me????? OK ............ This bulletin they released specifies new "Excise Tax Due Dates" that basically say that if you were not liable for more than $50,000 of taxable liability for the calendar year prior, and you don't think you will be above that amount this year, then you can pay your taxes on a quarterly basis beginning 1/1/17. That's cool. It also says that if you reasonably (can someone define what that may mean?? "reasonably" according to who???) expect to not be liable for more than $1,000 in taxes this year as well as in the prior year, you can now pay those taxes annually rather than quarterly. No offense here, but if you have less than $1,000 in taxable liability as a distiller, you have to be quite small as that is only about 463 bottles a year, or in other words, just under 40 bottles a month. Ok, on to the "beefier" subject of this information and what you are really wanting to know; who is exempt and no longer needs this pesky bond stuff anyway!??!!?!? Well, staring as of 1/1/17 it says, " ..... taxpayers who pay taxes annually (so anyone paying less than $1,000 a year, my words here, not theirs) or quarterly (so those folks doing less than an $50,000 a year in taxable liability) will be exempt from the requirements to file bonds covering operations or withdrawals of distilled spirits or wines for nonindustrial use, or beer." Based on the fact that taxable liability only comes into play when spirits are withdrawn (yes, in some cases destroyed, but lets not focus on the negative here people) for distribution/sale (not a transfer in bond, I know my stuff), then as long as you will have less than $50,000 in taxable liability you are good to go without a bond. So is this as clear as mud yet!?!?!?! Basically what is being said here is that if you are going to have less than $50,000 in taxable liability this year (and you had less than that last year) you do not have to have a bond any longer. "BONDS!??! WE DON'T NEED NO STINKING BONDS!!!!!!!!!!" WooHoo, right!?!?!? Well ................... not so fast there speedy. There are a few things to consider before making the call to your agent and telling them to cancel that money sucking bond (actually, my bonds are the lowest in the country so they are not "money sucking" at all). First off, are you close to that bond limit of $50,000? If you are close, or expect to be "reasonably" (hahahaha) close, you may want to leave it in place, just in case. You do not want to cancel the bond only to have to turn around a few months or a few quarters later because you have increased your sales/distribution which equates to withdrawal, and now need to be bonded again. Another aspect to consider is this, when does your bond term come due? I have a lot of folks who will fit the requirements to cancel their bond, however their bond terms renew in November or December. According to the stipulations, they need to renew and keep their bond up until 1/1/17, so they MUST renew it. Here is another caveat to that, depending on the surety carrier that issues the bond, the premium may be pro-rated (you can get money back for the unused portion of the term once you cancel) but they may keep a minimum of $100 service fee ............ or ............. if the premium is 100% full earned, you may not get anything back. Well, why cancel the bond at that point?!?!?! The other issue is that the TTB will not allow you to cancel the bond until all unpaid taxes are rectified from 2016. Once they are you can file for a bond exemption with the TTB through the PONL system but they never specify how long that process will take. So here again is something to watch out for. What if your bond term is after the 1/1/17 date and you file for the exemption but it takes them 6 months (for whatever reason) to process it. Do you need to renew your bond while this is in process? At this point in time I would suggest that you do renew it since you do not want to be out of compliance during the processing time. See, this is not as simplistic as it is made to sound. Obviously, these scenarios are all in regards to existing DSP proprietors. So what about new applicants. Well, for new applicants, since the current processing time for a permit is over 200 days, you should be able to apply for your permit and ask for the exemption during the permitting process. That part actually does sound simplistic and appears to be pretty straightforward. There is a first time for everything!!! So what does this all mean, in real facts and figures and how do you know if you will be below the magical $50,000 mark? Well here is a quick mathematical computation for you (keep in mind these numbers are rounded for simplistic purposes): Current excise tax liability = $13.50 per proof gallon (proof gallon defined as 50% ABV or 100 proof) Taxes are only due when spirits leave the plant, so anything in holding/process does not count against this amount Most spirits go out the door at 80 proof, so the tax rate then would be $13.50 x .8 = $10.80 per gallon (since it is proofed down) Therefore, $50,000 / $10.80 = 4,629 gallons a year or roughly 23,000 bottles of booze, or nearly 2,000 bottles a month Here are pretty much the same numbers but done in actual proof gallons (not rounded): $50,000/$13.50 = 3,703.7 p.g. One case of 12-750’s at 80 proof = 1.902 p.g. per case 3703.7 p.g./1.902 p.g = 1,947 cases or 23,364 bottles per year (cases rounded down to full case) 1947/12 = 162.25 cases per month 23,364/12 = 1947 bottles per month So there you have it folks. A long run for a short slide as it were. The just of all of this is that some of you may not need a bond if you are just getting going and some of you may not need a bond even if you are operating, however make sure you understand where you stand and when the bond term comes due before cancelling you bond. As always, if you have any questions please feel free to reach out to me with any questions. I can be reached here on the forums, via email at aaron.linden@hubinternational.com , or give me a call or shoot me a text at 307-752-5961. I am always more than happy to assist you with your bonding questions and do keep in mind ***** I OFFER A FULL LINE OF ALL DISTILLERY INSURANCE NEEDS, AS WELL, I HAVE THE BEST RATES IN THE COUNTRY. ***** Just sayin'. Best, Aaron
  11. Dear Forum Members and Anonymous Info Gatherers, I am so very excited to announce that I will be in attendance at this years convention in San Diego and I look forward to seeing all my old friends and meeting so many of you that I have either communicated with already, or have yet to meet. I will be on the Expo floor located at booth #531 and I encourage all of you that are attending to stop by and introduce yourselves!!!! This year is going to be GREAT!!!!! Since I am always striving to be on the cutting edge of all things insurance and TTB bonding (if you have not read my whitepaper posted in the forums, go, read it right now! Actually, you can wait until you finish reading all of this post first, but then go immediately and read it!) I am super excited to announce that not only will I be in attendance this year, but as well I will have the incomparable Richelle Smith with me as well. Richelle is my TTB Bond underwriter and not only will she be there to assist in answering questions, SHE WILL ALSO BE ABLE TO UNDERWRITE AND ISSUE BONDS ON THE SPOT should you have a need. We will have all of the applications on hand as well as the ability to run all of the needed information and issue bonds right then and there. So, no matter if you are a "first timer" needing a bond for your up and coming distillery, or if you are just in need of a larger bond that you cannot procure though your "normal" channels, we have you covered. Oh, and BTW, our rates are the cheapest in the country for the last year and a half running. So you totally need to swing by and check that out as well since we do more of these than anyone else out there and we are fast, fun, friendly, and did I mention "cheap"!!!!!!!!! Last thing for your consideration, I will also be giving a presentation at the breakout session on Tuesday April 5th at 10:30 entitled, "Insurance: What you know, don't know, need to know" and I would love to pack the room! I promise it will be fun and not "boring old insurance", trust me, I get that insurance can be boring and a horrible topic. Not with me though, I hit all the fine points, the good stuff that you need to know and I keep it light unless you want very specified details. I can do that as well, but I like to keep that for only those that really want to know more as we get into the "nitty gritty" later on. Anyway, please, everyone stop by the booth, say "hi", get a bond while you are in the neighborhood (I want to keep Richelle super busy), and come listen to and interact with me during my presentation. I simply cannot wait to see everyone and I look forward to meeting many of you for the first time.
  12. Dear ADI Forum, I wanted to take a few moments to send out a heart-felt "THANK YOU" to the many of you that have made my exclusive distillery insurance program so successful to date! I just entered into my 45th state of distillery business and could not be any more pleased with the success that we have had and it is all thanks to you fine folks in the forums. You have been wonderful to work with, you have supported me from the beginning and have shared my information with others outside of the forums as well. I have had the great pleasure of getting to know many of you, watch you get going or grow over the last few years. As many of you already know, I have worked with distillery clients for many, many years, but not until I became involved with ADI and the forum was I able to connect with so many great people. I cannot think of any other way to put it besides just saying, "Thank You all so much, you mean the world to me."
  13. Good Day Everyone, As many of you may know, I was out of the office the last several weeks traveling around with the fam and just taking a bit of much needed R&R. Timing is everything though, and in this case I missed the timing. So, for those of you in the know, maybe you have already been hip to the recently released podcast that came out on 7/22/15 on the Firewater Network featuring yours truly. If not, that is why I am posting this here and now. If you would like to tune in at your leisure and listen when you like, I have included the link below of my interview with Zachary Farley of Firewater Network where we cover pretty much everything you want to or need to know about your distillery and the insurance and bonding aspect. I hope you give it a click and give it a listen. It is informative and gives you a pretty good understanding in regards to what you will need or possible what you may need to change about your current insurance program. http://firewaternetwork.us9.list-manage1.com/track/click?u=72f3e834e2ba795522e617a94&id=5105256efe&e=8d0f2409c3
  14. Insurance: a three tiered step-by-step guide for your distillery I am asked constantly by folks from all parts of the globe (literally) as to how the insurance process should go, what they need, and at what point do they need it. Actually, I am asked about this so often that I decided to sit down for a few minutes and put it into post since there must be more folks out there wondering the same thing. For the purpose of this post I am going to only address the process for the US at this point and do so at a 30,000’ perspective as to not bog anyone down in the minutia of deeper subject matter. However, if you are in “some other place” or would like a deeper understanding of some piece of insurance please feel free to message me or email me as I do have quite an extensive knowledge of the process in several other lands and a deep understanding of the nitty-gritty nuances of all of the insurance aspects. Anyway, on to the process. The typical insurance process, step one: You are applying for your DSP and you run into the section where it is calling for the DSB (Distilled Spirits Bond) that you need to give to the TTB in order for them to process your permitting. This aspect of the “insurance” side of things is perceived as one of the scariest and most difficult processes to struggle through. I am here to tell you that simply is not the case. Many people have horror stories or have heard from someone that this was the worst part of the whole process. That the bonding screwed up everything and set them back months, or that when they were finally able to get through this horrible process the bond ended up costing them an insane amount of money. Although many of those stories are true and oftentimes people do lose precious time or they indeed pay an incredible amount of money for their bond, it all boils down to one thing; the person they are working with. Knowledge and relationships are king when it comes to bonding and anyone that has worked with these types of bonds for years on end should be able to assist you through the process in the matter of a few minutes. From assisting in the figuring of the taxable liability amounts, to the application process, this truly should not take longer than about 15-30 minutes start to finish. Once those “meat and potatoes” aspects are figured out and the applications are complete you should be able to have the executed bond form in your hands and ready for submittal within 24-48 hours. If you are working with someone who has the knowledge and relationships in this industry, the bond should be a done deal within a day to possibly a few days and should never come back to haunt you. Don’t get me wrong, there is a myriad of things that can go wrong and many ways that the bond can mess things up. If you have an insurance professional though that knows their way around the bonding and what the TTB is looking for and how to avoid the pitfalls and snares, it really is a one-and-done deal. It really is that simple. Find someone who knows what they are doing and you will not lose any time and it will be the cheapest thing that you purchase for your distillery, hands down. The typical insurance process, step two: You have either acquired a building or are obtaining a lease on a space and there is an insurance requirement. If you are buying a location it may be that the lending institution is requiring that they be named “loss payee/mortgagee” on your insurance as well as possibly “additional insured” status and they want a certificate or evidence stating such. If you are signing a lease, the landlord may have a requirement to be listed as “additional insured” or at the very least require a certificate showing that you have insurance. Again, if you are working with someone who has an understanding of distilleries and has a great product where you can add and subtract coverage’s, this should be a very easy step to accomplish. If you are in a “triple net lease” situation and are required to insure the building, again, it should not be an issue. This is basically all there is to the second step, the securing of insurance for the location and your business. The typical insurance process, step three: You are ordering your equipment and items you will need in order to get set up and running. Once you have a policy put in place to satisfy those items discussed in step two, this is a no-brainer. The equipment and contents side of the policy is one that should be very simple to accomplish. Watch out however as to how these items are listed and what “perils” or coverage is being offered and/or excluded. This is one area where a deeper knowledge of how things work within an insurance policy is key. Someone who knows what they are doing should be able to provide you with a better and lower premium on the equipment than what is available in regards to standard “contents” coverage. Without divulging all my trade secrets here I will simply say that there are a variety of “legal and ethical” tricks that can be used to keep your costs down while actually providing you better coverage. As well, at this time you may be in need of securing many other types of coverage in order to make sure that you are properly insured and protected moving forward. Liquor liability; Cargo coverage; Products and Complete Operations; Workers Compensation; and Product Valuation among many other things may need to be considered at this point. An agent with experience in this arena should be taking the time to discuss your business plan with you. They should find out where you are at currently in regard to your needs and where you see things progressing to anywhere from 6 – 18 months from now. This process will not only assist you with the “realization” of timeframes and considerations, but it will also allow the insurance professional the ability to plan ahead with you or address commonly overlooked insurability issues. Again, watch out for how these coverage’s are written. The product valuation is one of the biggest issues that I see being overlooked. Almost ever carrier in the country uses the same endorsement form to insure your product and for the most part it is very lack-luster. I personally have developed and had adopted an endorsement form that gives true value to your product in the way in which you and I decide it should, not how the insurance company “may” decide to value it. God forbid the unforeseen happens and you lose everything, including your product. That is not the time to ask the question as to how you were insured and what you can expect in the way of coverage. In conclusion, this is a rather simplistic overview of an overall more involved process. With that said though, if you are working with someone that knows what they are doing, it actually can be this easy. A few things to keep in mind: 1.) Know your insurance professional and their background/knowledge. Ask the hard questions, find out how much experience they have in doing this type of work and how many other distilleries they write. YOU DO NOT WANT TO BE THE GUINEA PIG! This is your business, your baby. Treat it as such. If you are not comfortable with their answers, move on. Beware of the agent that says, “Well …… I have written a brewery before. How different could it be?” R U N !!!!! I know I am preaching to the choir, but a breweries and distilleries are VASTLY different in so many ways, and the insurance is certainly one of those ways; 2.) Know what you are purchasing. People have a view of insurance often times that it is just “throwing money down a rat hole”. That it is one of those things that costs a lot of money and they never get anything for it. I understand, but keep this in mind ….. If you know what you are purchasing and the value it brings to you, you will not feel this way. As well, in a perfect world you hope it works out that way. That you pay money in for the whole life of your business and never get anything back from the insurance company. If they have to make a pay out that means that you have either hurt or killed someone or you have sustained an incredible life altering loss to your business. I am not talking about the roof claims or hail type situations, I am talking catastrophic here. If your insurance person makes you full aware of what you are buying, you should never feel as though you are getting ripped off. 3.) Keep in communication with your insurance folks. When you make a change or even better, when you are thinking about fixing to get ready to make a change, give them a call. There may be insurability issues in what you are thinking about. Even if there are no issues, you need to be sure that you have the protection you need to cover the change. Often times the insurance folks are the last to know and that is not good. Loop them in at least every 6 months or each time there is a “big” change coming. 4.) Do it well and do it up front. If you have a good professional that is more a business partner in a way than just an “insurance agent” you should be able to confide in them, tell them exactly what you are doing and what concerns you have. You should not feel like you need to hide anything or not give them all the details. Work with them as you would a CPA or lawyer. They are (or should be, if they are not, run again) a professional and will treat your information with the utmost confidence. Be open an honest and trust them implicitly. If you don’t, why are you doing business with them at all? 5.) **** DO NOT “SHOP IT OUT” **** This is one of those areas that really does not make sense to anyone in the insurance industry. There are people out there that will call 5 different agents and ask them for a quote. They want to “keep everyone honest” and they think by doing so it will ensure they get the best deal if they have multiple people involved. Stop. If you find someone that you are comfortable with that has the background and knowledge and that you trust implicitly, let them shop it for you. Bringing in multiple people only confuses things. Insurance carriers only allow one quote to go out to the first agent in the door. So if you go to five different people they are all going to try to get it out first and block the markets anyway resulting in what you hoped to avoid in the first place. You will then be forced to sign Agent of Record letters to allow other agents to obtain other quotes that some other agent blocked, blah, blah, blah. It is a nightmare for you, the agents and the carriers. Just don’t do it. Pick someone, one agent and work with them exclusively, end of story. I hope this information is helpful and valuable to anyone reading it. The insurance and bonding process should be easy and can even be fun if you get the right person. If you have any further questions or if you view me as being “that person” to assist you with your insurance needs please reach out to me. You can PM me here on the forums, email me at aaron.linden@hubinternational.com or call or text my cell at 307-752-5961. I truly am here to help in any way that I can and I am always happy to answer any questions that you may have. Have a great Memorial Day Weekend! Best, Aaron “InsuranceMan” Linden
×
×
  • Create New...