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  1. 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
  2. InsuranceMan 2.0

    Tuesday Morning Insurance Tidbit - HNOA

    Good Morning fellow ADI citizens!!!! In today's installment of the Tuesday Morning Insurance Tidbit being delivered fresh to you from my secrete command center in Sheridanopolis, I am going to address a very common question that comes up when I, InsuranceMan 2.0, go through proposals and coverages with my clients. What is this, “hot topic, this highly questioned coverage!??!!”, you may ask. Fret not fine citizen, I am here to guide you through the dark and treacherous land of insurance coverage. The topic we are discussing today is … Da – Da – DAAAAA!!!!!! Hired and Non-Owned Auto. It may be a term you have heard, although, it very well may not be as most policies I see for distilleries do not include this invaluable coverage. What is Hired and Non-Owned Auto (from this point forth we will refer to it as “HNOA”. Feel free to throw that term around and look “insurance-telligent” in front of your peers and agent 😉) ? I am glad you asked! HNOA is an auto policy that fills some major auto liability gaps and helps to protects your distillery business/entity in the case of an auto accident. Did you know that if you or an employee are driving a rented vehicle or your own personal vehicle for business being done on behalf of the distillery/entity, and you were to be involved in an accident, your personal auto policy would more than likely deny any coverage for the actual business/entity?????? You didn’t think about this did you? Why would you, you trust the “insurance professionals” to come up with these thoughts for you, that is why they are being paid, right?!?! Well, if you don’t have this coverage or have not heard of this coverage, why are you paying them, they didn’t come up with this?!?!?! This is why you should be with me, InsuranceMan 2.0!!!!!!!!!!!!!!!! I am here to protect and serve the fine citizens of this land! OK, at this point let us take this coverage and break it down. This coverage consists of two parts, the Hired, and the Non-Owned. Let’s start with and define Hired. Hire is defined as … “to engage the temporary use of at a set price; rent”, according to dictionary.com. In plain English please! It means a rental vehicle. Something you are paying a fee for to use on a temporary basis. Hired Auto Liability coverage can essentially take the place of liability insurance needed in order to rent a vehicle from a rental car company. A bit more on this later though. Hired Auto coverage protects your business/entity for any liability arising out of an accident to may occur while using a hired/rented vehicle. IT DOES NOT PROVIDE PERSONAL COVERAGE FOR THE DRIVER!!!!!!!! NOR DOES IT PROVIDE COMPREHENSIVE OR COLLISION DAMAGE COVERAGE!!!!! Please note these items, it is very important. For the sake of this topic however, all we are concerned about at this point is protecting the business from automotive liability damages. Although your personal auto policy may cover you for your personal liability in a rental vehicle, most personal insurance policies exclude the coverage of “business use” and will not provide any liability coverage on behalf of the business/entity. Due to this exclusion, as you can see, this portion of the coverage is quite valuable and is somewhat of a “must-have”. “But I don’t rent vehicles for my business.”, you may be saying. Understood and fine point my dear citizen. I hear you loud and clear, however … You never know when you may need to lease or rent a vehicle. Maybe you flew into another town to have a business meeting and need to rent a vehicle, or maybe you need a van or box truck to run a delivery. You do not want to try to procure this coverage at the moment it is needed, and quite honestly, HNOA is a generally a bundled product. These coverages are often done in concert with one another and there is no savings to only go with one or the other. If I may, please allow me a quick aside as well to this topic. If and when you do lease or rent a vehicle, always check with the rental agency to see what the associated cost is to purchase insurance coverage directly from the rental agency. Generally, the rental agency insurance will not cover you for your own personal liability or any business liability (and keep in mind your personal auto policy will excluded the business auto liability. See how this is all an intertwined web of confusion, and why you really need the “Hired” part, and why you really need me, InsuranceMan 2.0!!!!!!!!!!). What it will cover and provide for in many cases is “walk away” coverage for damages. Remember earlier when I said, “… please note these items ….”???!?!?!?! Remember what I asked you to note???? If not, scroll back up and take a look, I will wait …………………. ……………………… ……………………… ……………………… Ah, I see you are back. Did you find the answer?!?!!??! That’s right!!!!!!!!!!! Comprehensive and Collision damages are excluded under the Hired portion of the coverage. The Hired portion is only dealing with liability, no physical damage to the rented vehicle. Often times you can purchase the physical damage coverage directly from the rental car agency, and trust me friends, it is money well spent. There is a way to add on physical damage for hired vehicles to your own insurance policy, but for how often you may use it, and what it covers, it is generally not worth it. You are usually money ahead to purchase this coverage from the rental agency. “Well, I rent all my vehicles with my business/personal credit card and they provide coverage for damages, so why would I spend more money?!?!?!?!” Excellent point vigilant citizen! Unfortunately, it is a common misconception that renting a vehicle with a credit card provides all the coverage you will need. Whether you place Hired Physical Damage on your own insurance policy, or rent with a credit card, both have some very important exclusions that rental agencies may exploit. Rental agencies have things like “layup costs”; “diminution of value”, “loss of rent”; and various other charges that neither a credit card or a policy will cover. With that said, the coverage that you can purchase directly from the rental agency will often time cover those extra expenses. I will say it again … trust me, this is money well spent. A quick story … I rented a vehicle with a business credit card and was caught driving it near a tornado. Sand blasted the paint, pitted the windshield, and blew out a window. Although the credit card company covered the cost of the repair to the paint, windshield, and window it did not cover these “other costs”. Ultimately, it cost around $3,500 extra (as in out of pocket) to cover the layup of the vehicle, the diminution of value, and the loss of rent. If I had purchased the coverage from the rental agency, it would have not cost me anything more than the cost of their insurance. Lesson learned! Alright, do you need a bit of a break? No?!?!?! Then onward and upward into Non-Owned Auto Liability Coverage. You or your employee are running out to a big box store for some parts you need, or you are running to a local liquor store or venue to do a tasting. On your way to or from, there is an auto incident! The local law enforcement agency shows up and start asking questions. You or your employee say that you were out running around on behalf of the distillery (this happens, oh does this happen, more times than I care to say) at the time of the accident. The other party that you crashed into hears this and thinks, “OH! A distillery, those guys are made of money!!!!!” (As we all know this may simply not be the case, but they think it anyway since they think there is endless money in making alcohol.) Now, not only does the injured party sue you personally (personal auto coverage), but they sue the distillery as well thinking there are deep pockets there. Well, since the distillery does not “own” the vehicle (the name of the distillery is not on the title), if you do not have Non-Owned Auto Liability coverage, there would be no protection against a lawsuit. NO BUENO!!!!!! This coverage is crucial to have. I will tell you that in my 16 years as the vigilant protector of the fine citizens of "insuranceland", this is the number one claim that I have seen. Think about it. How many times does your product cause damage to someone? How often does someone come into your facility and trip over a box, or slip and get hurt? How often do you have a fire? Not very often at all, thank goodness! How many times are there auto accidents though???? ALL THE DANG TIME!!!!!!! In fact, studies have shown that the average driver, over the course of their lifetime will be involved in at least 3 to 4 accidents. That is why having this coverage is as important as covering your equipment, your general liability, your products, and your stock, if not more so! At the end of the day, when I sit down (still donning my InsuranceMan 2.0 super-suit, since insurance injustice never takes a rest, and I must stay frosty and vigilant) in my command center with a nice lowball of my favorite spirit-du-jour, I can rest somewhat easier knowing that the fine citizens that I watch over are protected to the best of my ability, as they drive to and fro conducting business in their Hired or Non-Owned vehicles. As always, if you have questions about these coverages, or if you are wanting to know about the nuances of insuring vehicles that are titled in the name of the distillery/entity, by all means, turn on the InsuranceMan 2.0 beacon and I will gladly come to your rescue. Send me a PM, call, or text me at 307-752-5961 and I will speed to your assistance. Until next time my friends, Stay Vigilant, Aaron Linden a.k.a. InsuranceMan 2.0 307-752-5961
  3. InsuranceMan 2.0

    Tuesday Morning Insurance Tidbit - PPC

    Happy Tuesday Morning Fellow ADI-ers, I wanted to offer a quick Tuesday Morning Insurance Tidbit for all of those looking to start a distillery, move to a new location, or open another location. In the world of insurance there are a lot of factors that come into play when trying to obtain coverage, as well as how those factors directly impact the premiums you pay. Today I want to focus on a topic that has been an issue for quite sometime, Public Protection Class, or PPC. The PPC program is a tool that was developed by the Insurance Services Office (ISO) for property and casualty insurers so that they can assess risk by a rating of "fire protection" services. The ISO pulled information from more than 47,000 communities in order to create this rating program. Essentially, this tool ranks PPC's on a scale of 1 to 10. A class 1 represents superior fire protection, whereas a 10 indicates that not even the minimum requirements are available. So what does that mean, exactly. Well, any of you that know me or have read my other postings know that I am a straightforward, "put it into plain English" kind of guy, so here is what it means; If you are located in a PPC 1 it means the fire department is located super-duper close to you, it has a full time staff, and you have a fire-hydrant pretty much on your property or in your building. So if something were to happen at your distillery and there were a fire or emergency need, the fire department would probably know about it before you do and they would quell any threat of loss before it caused much damage. With that being said, I am sure you have concluded for yourself at this point that a PPC 10 is probably not so good. You are correct! A PPC 10 to an underwriter causes an instinctive primal reaction wherein they shield their eyes, snap their head back, scream in disbelief, and start mumbling incantations. Picture the scene from the "Exorcist", yeah, kinda like that!!!!!! Nearly every underwriter in the known universe will become physically sick at the thought of a PPC 10. Actually, most carriers will not even entertain a risk in a PPC 7 or higher. I have even been told that these locations may as well be on the moon. I wrote a post about that here, actually: So what does this mean to you? It means that when you are considering your location you need to do some research in regards to the PPC. Insurance is not usually the first thing that people have in mind when wanting to open a distillery, but it should be dang near the top of the list. If you do your legwork ahead of time and find out what the PPC is of your proposed location, it is going to make your life much easier, and cheaper in the future. As I said earlier, this one factor alone can affect if you can even find insurance coverage and then what you will pay for it. Property rates on your building, equipment, and stock will be much lower in a PPC 1 then they will in a PC 6, and if it is a PC 7 or higher, well my friend, get your checkbook ready!!!!!!! Now you may be wondering, "OK, I need to find out the PPC of the location I am interested in. How do I do that??" The answer is actually very simple. Pull out your phone, google your local fire department, give them a call and tell them you would like to know the PPC of the address in question and they will tell you what it is. Voilà! Mission accomplished! It really is that easy and it truly can save you a lot of time and money down the road. I hope you have enjoyed this Tuesday Morning Insurance Tidbit, and as always, I am here to assist you in anyway that I can when it comes to your insurance needs. I work with an incredible amount of distillers all over the country and I have seen pretty much everything, so if you have questions, I more than likely have answers. Please feel free to give me a call at 307-752-5961 at any time. Best, Aaron Linden (aka InsuranceMan/InsuranceMan 2.0)
  4. InsuranceMan 2.0

    Tuesday Morning Insurance Tidbit - Q&A

    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
  5. InsuranceMan

    Technology Woes

    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!!!!!
  6. InsuranceMan 2.0

    Tuesday Morning Insurance Tidbit - BOR/AOR

    Happy Tuesday morning, ADI, In today's installment I want to start out by saying I hope everyone had a very wonderful and reflective Veteran’s Day. The recognition of this day is something that I personally hold very near and dear to my heart. I have Veterans in my family, friends that have served, and I am proud to say that I work with many former and active military members who own and operate distilleries. To all Veterans everywhere, you have my loyal thanks and gratitude. Let us never forget all you have done for this country and our freedoms. Now on to the topic at hand: The nasty, low-down, evil, and vile BOR/AOR!!!!!!!! What is a “BOR/AOR” you may ask … Well let me tell you … The acronym “BOR/AOR” stands for “Broker of Record” or “Agent of Record” letter. This is one of the oldest, nastiest, dirtiest, and possibly the most deceitful things that Insurance Agents have in their box of tricks. The function of a BOR/AOR started out, as most things do, as a good and helpful tool in the insurance world. However, it was not long after this process was developed that many chose to use it for evil instead of good. The BOR/AOR process was developed to assist clients in moving their insurance from one agent to another in the case that the current agent was unresponsive, or if the agent and client reached an impasse and could no longer work together for whatever reason. In some instances, it can be useful when a client wants to move a policy to someone with expertise in a certain area. The BOR/AOR process allows the client to reassign their existing policy, via the same carrier, to another agent all while retaining their current coverage and premium. Again, this process was to only be used in unusual circumstances where the client and agent simply could not see eye-to-eye anymore, or an agent possessed a certain expertise or skill set. It should only be used to counteract “Irreconcilable differences” shall we say. The same could be said for the quoting process, and many agents use the BOR/AOR even in the early onset of working with a client, tisk-tisk! Most insurance carriers will only release one quote proposal to the first agent that has submitted the business accompanied by a full application. The reasoning for this is that the carrier does not want to complete with itself across several different agents who may be submitting information that differs from one to the other. One agent may submit information stating that the insured is doing x, y, and z, while another may say they are doing a, b, and c. Completely different things, completely different proposals. Therefore, most insurance companies avoid releasing multiple proposals whenever possible. This is where the nasty agents come in and try to BOR/AOR the quote proposal. The NERVE!!!!!!!! Fast forward to about 5 minutes after this potentially good process was put into practice and you will see THE DARK SIDE! Insurance agents discovered quickly that this process could be abused in order to obtain fully written policies or proposals quickly and without having to put in much work. They found that they could simply have someone sign a letter, submit some information, and BAM! Instant money! Sounds like a pretty good gig, right?!?!?!?!?!?! Well, that all depends on your point of view and how the process is presented. Again, if this process is utilized correctly, then there is nothing wrong with it and it is useful. If your agent is a “hit it and forget it” kind of sales person who wrote your policy and then never spoke to you again, but your coverage is good, and you want to keep it but move it to someone else, then this is a potential way to make that happen. This is not usually how it is presented though. Most agents will tell a potential “easy mark” client that in order for them to quote the business, or open up the markets, that all you have to do is sign this letter to give them access. Many times, they won’t even say that much. They will simply say that you need to sign the letter in order to allow them to work on your behalf. Afterall, you have to sign so many documents anyway, what is one more? So they just slip it in. Many agents will go with the out-and-out lie approach. Now, I will throw in a caveat here … I have probably handled around 100 or so BOR/AOR’s in my career over the last 16 years. Each and every one of them has been on the up-and-up though. I always preface this process in the same way, and in my assertation, the correct way. I ALWAYS say to the client, “By signing this letter you fully understand that you are FIRING your current agent and HIRING me as your authorized representative, correct? Once you sign this letter, the other agent will be notified directly by the company and given 10 days to try to win you back. They will call you, they will email you, and they may even get mad at you. I want you to fully understand that by signing this letter you are giving me the authority to represent you and your coverage to the insuring company.” In my case, with this understanding laid out in advance, I have never had a client say that they did not want to go through the process. With me, it is due to my expertise and abilities that clients will knowingly move their policies. I will say though, that in ever case, I will try to find replacement coverage that is as good or better than what the client has prior to ever even broaching the BOR/AOR subject with them. It is never, and should never be the first thing that an agent does in the process of assisting you with your insurance. That is just deceitful and not how relationships are built. A quick story … about two years ago I had a client that had a partner and that partner agreed to meet with a local insurance agent. They had the meeting (although my friend did not want to) and found out quickly that not only was the other agent not an expert in distilleries (as he had led them to believe), but he was also new to insurance as a whole. They thanked him for his time, and as they were literally getting into the cab back to their office, he ran up to the car and told my friends partner that he needed a quick signature in order to prove to his boss that he was out at a meeting. They both thought this was strange, but the partner signed his name anyway, figuring maybe it would help this guy out. Well, lo-and-behold, it turned out that he was actually having him sign a BOR/AOR letter!!!!!!!!!!! I was notified the next day that my friend had signed over all authority on his policy that we had work on together for years. So, I called him up to find out what was going on. He stated that no one signed any such letter, that they would never reassign my work to someone else. As he reflected on it, he recalled that his partner signed something, but it was just a verification that they had a meeting with this agent. I told him to get a copy of that document and really take a look at it. Sure enough, it turns out it was a BOR/AOR letter, but the other agent had hidden that part under another sheet of paper, and his partner was deceived into signing the policies over. In the end, we countermanded the letter and that agent lost his insurance license and faced penalties and fines for his deceitful behavior. The long and the short of this Tuesday Morning Insurance Tidbit is this … Look at everything you are signing. Know what you are signing. Ask questions about what you are signing, and if you ever find yourself in a similar situation, walk away. If someone is willing to use deceitful practice in order to start a relationship with you where they are supposed to be taking care of you and have your best intentions in mind, the relationship should never be started in the first place. Stay Vigilant, Aaron a.k.a. InsuranceMan 2.0 307-752-5961
  7. InsuranceMan 2.0

    InsuranceMan 2.0

    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
  8. Happy Thursday, This week’s installation of the Tuesday Morning Insurance Tidbit is occurring on Thursday as you may have noticed. Tuesday was a bit of a CRAZY day in the land of InsuranceMan 2.0. Suffice to say, as we all know it was election day, and yours truly has been voted in as the newest City Councilman in Sheirdanopolis! So, among about the 1,000,206 other things I had going on that day, that was pretty big and occupied quite a bit of my time. Then there was yesterday ... oh yesterday, you seem so very long away, anyway ... A lot of interviews, blah, blah, blah. Long-story-short, that is why we are just seeing my weekly post today, and in the afternoon no less. But as an ongoing heading, I thought I would keep with the theme since "Thursday Afternoon Insurance Tidbit" does not have the same beautiful ring to it. Speaking of "to it", let's get to it. Special Events!!!!! We all know them, and most of us love them. You get to get out in bigger venues, have people taste your amazing products, and often times it leads to sales. Sales either right then and there, or it brings them to your tasting room, or you notice your products flying off the shelves quicker. Either way, you gotta love sales! The issue however is the special event itself. Most venues come with a few certainties. Usually you have to "pay to play", meaning there is usually a fee associated with having a table or space at a venue. Whether it is a farmers market, or a bacon and something festival ('cause who doesn't love bacon?), or a larger specific type of spirits show, they usually want money for your spot. Then there is the dreaded "insurance provision"!!!!!! ? This is the one that can either be a non-factor, or a HUGE DEAL! Smaller venues may ask for a certificate of insurance showing your liability limits and liquor liability limits, and they may specify that they need to be $1,000,000 occurrence, with a $2,000,000 aggregate, or they may be larger than that for some venues, or smaller. It just depends. Often times though, it is not the issue of the correct limits, it is the issue of the venue host asking to be named as "ADDITIONAL INSURED". That is where the ease, or pain in the rear can come in when trying to provide that certificate of insurance they are asking for. If you are with a "standard" carrier, often times there is a proviso stating that there is a BLANKET ADDITIONAL INSURED endorsement, which states (short layman version), "If someone requires additional insured status, either by written or verbal contract" then there is no issue. The agent should be able to issue that certificate, in-house, in less than an hour and then simply notify the carrier. Ah, this is the dream scenario, where you hear soft instrumental music playing, birds chirping, rainbows, and unicorns frolicking in green fields. The certificate of insurance seems to appear out of thin air, float gently to the venue host, where they accept it with a loving nod and a smile. Their smile may even have a sparkle to it with that satisfying "tink" sound. This is how it should be, when everything is right in the world. Then there is the other scenario ? You have the above scene pictured in your head, but you pick up the phone to call your insurance agent, with a smile on your face … this is going to be great!!!!!! They answer the phone, listen to your request, and laugh in that maniacal and menacing “BWAHAHAHAHAHHAAHAH!!!!!!!!!!!” way. What?!?!?!? That is not supposed to happen. Where are the unicorns, and the birds!?!?!??!! Not today, pal! Your agent, after laughing now takes on the voice of a demon and tells you that you are with a non-standard carrier, and they are going to charge you to add someone on as an additional insured. You say, “But it is only for one event, one time.” They laugh again, rubbing their hands together and tell you it does not matter. UGH! Could this get any worse?!?!!? Funny you should ask …not only are they going to charge you between $100 and $150, it could take days to get the certificate you need. “BUT I NEED IT FOR TOMORROW!!!!!!!!!!!”, you plead into the phone. Is that the smell of Brimstone I smell??!?!?!? You are in Special Event Hell!!!!!! This is something that you need to be made aware of, PRIOR TO PURCHASING YOUR INSURNACE POLICY!!!!!!!!!!! There is nothing wrong with having your insurance provided by a non-standard carrier, heck, sometimes there are reasons beyond your control that makes it impossible for your coverage to be placed with a standard carrier, and that is ok. No one is going to hold that against you. You do need to know though, what kind of coverage you have and if you are going to be charged for special events. Why does this make a difference???? Because of $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ If you are planning on doing 12 different events throughout the year and each one is going to cost you $100 more in premium, well then, maybe that lower insurance proposal was not worth it. Paying out $1,200 more in premium so you can attend special events is costly and you need to be made aware of it prior too. I will say, there are way to avoid a charge, or minimize it, but InsuranceMan 2.0 cannot divulge all of his secrets here. Long-story-longer, be prepared. Know what kind of coverage you have. Ask pertinent questions about special events and any additional charges that there may be or if they will be covered. Again, there is nothing wrong with a charge for these exposures, but the day before you need a certificate is not the day to find out. You need to know your policy and the details within, so ask questions. OR, you can simply call me, and I can handle all of your insurance needs for you, and have discussions upfront and set the expectation. I will end today saying that if you call me and let me handle your insurance needs, you will have a more euphoric experience than the picture I painted in the first scenario. Dealing with me is like all of that wrapped into one, while you get to ride a flying Alicorn through a rainbow that is made out of your favorite alcoholic sprits … and you get to taste them all! Best, Aaron aka - InsuranceMan 2.0 307-752-5961
  9. InsuranceMan 2.0

    Tuesday Morning Insurance Tidbit - Valuation

    Good Tuesday Morning Everyone, It is time again for the weekly installation of your Tuesday Morning Insurance Tidbit. Today I am going to discuss valuation, and even divulge a bit of a secret that most insurance folks have no idea exists, but can save you some premium dollars. Who the heck does not want to save some moola where they can?!?!?!!??! First, before the big "reveal" on saving them greenbacks, let us discuss valuation. When was the last time you took a good hard look at your insurance coverage, specifically in regards to valuation of your equipment, stock, and just plain, good old fashioned stuff!?!?! Many purchasers of insurance buy a policy (not necessarily knowing what they are buying) and tend to forget about it unless they need it in the case of some unfortunate loss or accident. This happens all the time. As well, if your agent is a "hit it and forget it" kind of sales person, they probably are not asking about any changes that may have occurred throughout the initial start up months, or years for that matter. THIS IS NO BUENO!!!!!! Lets start with the folks that are just new to the distilling world. If you are just starting up, there is a lot of change that takes place over the first several months. You may be adding equipment, you may be adding value in product that you are producing, things change quickly during this initial phase. What are you doing to ensure that you have the proper coverage? That chiller that just arrived that you have been waiting on for months, is that covered under your policy? Do you know? How can you tell? VALUATION! You should have a certain limit of insurance covering for the replacement cost of all the stuff you have in your distillery. If that value was only inclusive of the items in your location at the time you bound the policy, did you pad that number enough to include that new chiller? If not you are under-insured and could face a co-insurance issue should something go wrong. One of the most overlooked items in regards to insurance is valuation and making sure you are keeping it at a level that you need in order to cover a loss. The same goes with product. Day one, the first day you bound the policy, you probably did not have product sitting around (unless you sourced a bunch of stuff, then maybe you would have coverage). Fast-forward a few months ... now you have, let's say, $15,000 worth of hooch that you have made and it is waiting to go out. Is it covered????? More than likely it is not, and it needs to be added to the policy. Or perhaps you just received that big shipment of bottles, caps, closures, boxes ... is that value covered on your policy???? Insurance policies are dynamic, they are not static. You are not stuck with the policy that you bought day one. You can make changes to your policy at any time you wish. Adding or reducing coverage can happen at anytime you wish, but it is up to you to let your insurance person know what is happening (or if you are working with me, I periodically check in, especially in the first year) to make sure you are covered correctly. Yes, there may be more premium associated with making the changes, but better to pay a bit more knowing you have coverage than gamble with your business that you have worked so hard to build. CHECK YOUR VALUES! Stock on hand is a largely overlooked item. That $15,000 in hooch that you have from above has now grown to $50,000 lets say ... but your policy is still only covering you for the original $15,000. Your policy is only covering you for whatever amount is shown in the policy forms/declarations, not a penny more. So if your policy still only shows that you have $15,000 worth of stock coverage, that is all you are covered for. So if you were to lose all $50,000 you are not going to be happy with what the claims folks have to say. The maximum amount shown in this case was $15,000 but you had $50,000 in stock, well the insurance carrier is not going to say, "That's ok Mr. or Mrs. Insured, we can see you had more stock so we will make it all good for you." NO! In fact they are going to say something very different in deed. They will actually say that you were only paying premium on $15,000 when you actually had $50,000 in value so you knowingly under-insured your stock and have violated the co-insurance clause of the policy. So now, not only are you going to be out $35,000 in uninsured stock ($50,000 - $15,000 = $35,000 you did not have insured) but they are going to hit you with the co-insurance penalty, and you will not even recover the full $15,000 that you did have insured. I will explain Co-insurance some other time, but the point is this ... MAKE SURE YOU HAVE THE CORRECT VALUATIONS SHOWN ON YOUR POLICY!!!!! Then there is aging stock ... UGH! Don't even get me started on this one. Almost all carriers and certainly dang near ever insurance agent have no idea what to do when it comes to aging stock. Again, that is where I come in. I built the only (and proprietary) spreadsheet known to man that can accurately depict the daily attained value for aging stock. This is a slippery slope people ... Don't trust just anyone to assist you with this aspect of coverage, here you need to trust a true expert. Maybe we will cover this in detail a few Tuesdays from now, but for the time being, if you have been operational for years and have product put up that is aging, CHECK YOUR POLICY! You do not want it to be covered at the value it was when it hit the oak (or however you are aging it) day one. Three years later, after it has gained value in maturation, if you have a loss, you don't want to be paid on what it was worth three years ago, if you can even get that, damn co-insurance again! OK, on to the "big reveal", the one that can save you some dough, some dead presidents, some cold cash. Did you know that even if you don't own the building you are in, you may still have building value on your policy???? What???? Yes, it is true. Even if you are in a leased space, you may be able to have building value. How you say? "Why is this a thing?", you wonder. Some items in your distillery can actually be classified as "building coverage". If it is permanently affixed to the building via plumbing, hard wire, bolted to the floor, or built into the building, then it can be considered "building". This one slips right past 98% of all insurance folks. So why would you want to insured these items as building as opposed to "contents"? It is WAYYYYYYY cheaper! "Contents" is loose stuff that can be picked up and walk away with, stolen, absconded, to be seen nevermore. So the insurance rate is higher on these types of items. Now, you are smart readers here on the forum so I know you know where this is going already, but I am going to spell it out anyway. Aside from your product, what has the most value and therefore costs the most to insure?????? Your "big ticket" items. Your still, your mash tun, your chillers, your big equipment. So if you are paying "contents" rate on these items, you are probably paying hundreds if not thousands of dollars more than you should be since there items are more than likely not "contents" at all since they cannot just up and walk away. Ahhhhh ... it take the keen eye of InsuranceMan 2.0 to know these things and my super-ability to save you money. That is why I am the superhero insurance agent to so many, year of experience and the supervision to see where you can save money! The last valuation item I want to caution you about is Tenant Improvements and Betterment's, or TIB's. If you have gone into a building and done a ton of work to make it "distillery ready", have you insured against that loss? Even if you don't own the building, you can insure your investment into that property that you have made to make it workable for your business. Some people have tens of thousands if not hundreds of thousands wrapped up in TIB's, but if you are not insuring that value, then you don't have insurance for that value. Check your policies, people! Last but not least is if you do own your building, is the value there correct? Again, it could come in the way of improvements that you have made over the years, or even just the fact that the cost of construction is constantly going up. When was the last time you really looked at what your building is worth and checked your policy to make sure it is reflected with a correct value? If you are like many, it has been quite a while. Again, that is why I am here, to assist you in making sure you have the correct coverage for accurate values. So, until next time, this is the superhuman, insurance powerhouse known as "InsuranceMan 2.0" signing off. Stay tuned for the next installment of your Tuesday Morning Insurance Tidbit, with me, InsuranceMan 2.0. Now, I am off!!!!!!! I hear the cries of some poor soul with immediate valuation needs. Stay vigilant!!!!! Best, Aaron Linden InsuranceMan 2.0 307-752-5961
  10. Happy Tuesday Morning again my Fellow ADI-ers, In today's quick Tuesday Morning Insurance Tidbit I am covering "second opinions". Ah ... whether it is a serious medical condition, or a serious insurance condition, GET A SECOND OPINION!!!!! Over the course of the last week I have experienced similar situations 3 different times with three different clients. In two cases I had provided insurance proposals for their distilleries and they both came back and said, "My local agent seems to have a better/similar price." I asked if I may see the proposals that they were each sent so that I could do a comparative analysis, because that is what I do ... I am a professional after all. In one situation, the other agent was lower in premium by a few thousand dollars ... BUT WAIT FOR IT ........ It was because we may as well have been comparing apples (in the other agents case) to apple red Ferrari's (in my case)! The only similarity between the first two things is that apples and apple red Ferrari's are the same color, and the only similarity (if you could even call it that) between their proposal and mine is that they both were supposedly "insurance". Not to kill you with detail, but suffice to say, I put together the high-end sports car package covering everything this client needed in order to have the coverage they needed, custom fit for them so that they can operate on a daily basis without worrying about loss, damage, injury, etc. The other agent, oh dear me .... "the other agent" ... well lets just say they were only covering the buildings (no property, no General Liability, no products, no stock on hand, no liquor liability, no nada!!!!!), and they did not even do that correctly!!!!!! I pointed all of this out to the client and asked that they go back to the other agent and ask for similar coverage to what I proposed. The other agent said that they could not provide my level of coverage at any premium, so the distillery decidedly went with me for their coverage. The next situation was very similar in that there was a client that asked me to quote their coverage. When I came back with the specifics of what they asked for, they said that it appeared my coverage was within a few hundred dollars of what they were paying. I asked if I may look at their policy, they agreed. What they did not keep in mind was that they just went through a large expansion, and substantial increase of sales over the last year. Due to both of these things, they were able to add new equipment, more product on hand, etc. I quoted them all of the NEW BIGGER NUMBERS that they asked for (as well as the new higher sales figures) and that the old policy did not contemplate. I suggested they go back to their current agent and ask for a proposal that was in line with the values and sales I was given. When the other agent came back to them, they were more than $5,000 higher than my proposal that the client thought was only a few hundred off. The last situation was a distillery that has been in business for a few years, but they have never changed their policy since they day they started. They asked me to take a look at things after we discussed how things have changed over the years. Upon review of their policy I found that they were woefully under-insured in every aspect and that due to their sales being so much higher last year, they were actually subject to an audit payment that was due. We ended up reworking everything and they are now happy to be working with me where they know we will be updating things as need be. The point to all of this is, I have spent 16 years working with insurance, and 7 (almost 8 now) of those years has been specifically working with distillery insurance. I know what to look for, how to obtain what you don't have, and potentially rid policies of premium for things you don't need. I have said it 1,000 times over, I love local. I buy local where I live when I can ... but is your livelihood, your business, your dream, is that something you want to leave to chance with a local agent who has no idea how to insure your distillery??? Are you willing to let them cobble up some policy similar to a shoe store down the street that they write because they may think, "Well, insurance is insurance, it can't be that different. At least I can make a few bucks!"? Then, the worst part of it is, they send you a proposal to look at so that you can tell them if it looks good or not!!!!!!! WHAT!?!?!? If you were the insurance professional, you would do it yourself and I would be out of a job! Get a second opinion!!!!!! If you chose to contact me for a second opinion, or someone else, please, at least do yourself a favor and get someone to look the proposal/policy over. A few set of eyes are always better than one. I will say though, if you found out you may have a medical condition that was pretty serious, would you go to a local General Practice Doctor for your second opinion, or would you seek out the best specialist you could find? Well ... consider me Dr. InsuranceMan 2.0, the most specialized insurance doctor in the country. The difference is, I have no visit/consulting fee. My cost to take a look and offer my opinion is totally 100% free to you. Give me a call, the doctor is in! Best, Aaron Linden (aka InsuranceMan/InsuranceMan 2.0)
  11. InsuranceMan 2.0

    FET Tax Cut Article

    All, I just wanted to share an article that I was honored to be featured in recently that discusses the new lower FET rates, and what needs to happen at a grass roots level in order to make sure that the rates are extended beyond the 2019 date. I have done a lot of work with different groups in regards to the impact that this new rate has had throughout the industry but I would implore you, the owners of distilleries, do everyone a huge favor ... Document, document, document! Of all the groups I have worked with, and all the discussions I have had, the most important factor in the very near future is going to be documentation. If you are enjoying the new lower FET's, and you have been able to purchase new equipment, finally do that marketing campaign you have been dreaming of, or hire some new employees to increase your output, DOCUMENT IT!!!!! Put real numbers to work for you. If you have saved "X" amount of dollars due to the lower FET rate, and have reinvested that in the economy via purchases, employment, whatever, make sure you are documenting it and sharing it with your state guild, national associations, etc. I am here to warn you, if this information is not produced and shared in concrete numbers, the government all-to-likely may not extend this wonderful incentive. If no one can provide solid evidence as to the economic impact that this has had on the industry as a whole, there will be no incentive for the fed's to cut their own large source of funding any further. I would also caution that these numbers have to be produced sooner than later due to the fact that these rates are due to expire at the end of 2019 unless action is taken. That means that numbers for 2018 need to be pulled together and presented as soon as 2019 kicks off. The government is a big ship and it turns slowly, meaning, these numbers cannot be produced in September of 2019 with the hopes of having anyone have time to look at them in time to have an impact. Keep in mind that these lower FET's are due to "sunset" on December 31st, 2019 if action is not taken. That is what I am asking of you all, to take action. Start pulling your "economic impact" numbers together now, so that come the end of 2018, you can go into 2019 armed with the information needed to ensure that these lower rates are here to stay! Here is a link to the article in case you would like to check it out: http://www.spiritedbiz.com/inside-spirits-making-the-tax-cut-permanent/ Best, Aaron Linden 307-752-5961
  12. InsuranceMan

    PATH Act and Lower FET rates

    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".
  13. jbdavenport1


    Looking for a recommendation for an insurance company that knows what their doing with small distilleries. Our local folks are at a loss. We cant even get a quote on loss of product should a fire or other loss happen. Any guidance would be appreciated!
  14. 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
  15. Good Morning! I’m Sean with Tobacco Barn Distillery in Southern Maryland and have been a lurker on this forum for well over two years. I figured it’s about time that I officially joined so that I can express my gratitude for what I’ve learned from all of you during this time. With the help/ information in this forum, we received our DSP permit, and, beat the national average for that month by 22 days! Although the list of folks on this forum that I need to thank is long, I would be remiss if I didn’t specifically single out Aaron Linden, and Holly Bowers from HUB International. Their tireless assistance with bonding and insurance is truly appreciated. With any luck, and at some point in the future, I’ll be able to help someone as much as you all have helped me. Thanks, Sean added website http://www.tobaccobarndistillery.com
  16. InsuranceMan

    ADI Convention in San Diego

    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.
  17. InsuranceMan

    45 States and Counting

    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."
  18. DistillingInsurance

    Distillery Insurance

    Good afternoon folks and congrats on the success you all are having, the jobs you're creating and the fantastic products you're creating. I'm Kyle Rheiner - an insurance agent that specializes the insurance for Craft Distilleries and Breweries. I'm outside Philadelphia, PA, and I run www.craftdistillinginsurance.com I work with the majority of the distilleries and breweries in PA and NJ and have began to expand into Texas (we insure 4 here), Tennessee, NY, CT, DE, MD, and so on. Here's an interview I did regarding Liquor Liability Insurance with one of the largest insurance magazines in the country, and this article sent me to New Orleans to speak on a panel about specializing in a niche. We insure over 40 craft breweries and distilleries. It's all I do. Read my Interview with IndAgent Mag! Whether you're a startup or established, we have the experience. Cheers, Kyle Rheiner craftdistillinginsurance.com kyle@craftbrewinginsurance.com 610-217-8685
  19. InsuranceMan

    Insurance Discussion PodCast

    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
  20. 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
  21. Esteemed Forum Members, I am pleased to announce that I, along with several others, have formed a core group of industry experts in order to better assist those in the craft beverage industry. This team is comprised of a body of experts that have a tried and true historical record assisting those in the craft beverage industry that has proven these members to be the best of the best. We have formed this group in order to positively promote the industry as a whole through best practices, best services, advanced education and unparalleled expertise. Given the incredible rate of growth that the craft distillery industry has experienced and continues to experience, there are a lot of people “jumping in” and trying to take advantage of the rapid expansion in order to make a fast buck. My opinion is that many of these people are diluting the industry as a whole via their lack of knowledge, lack of true understanding, and lack of experience and expertise. Becoming involved only to try and take advantage of a situation and capitalize on it only for personal gain is short sighted and I feel it is also intrinsically wrong. Many seem to be in it only for themselves and in the end only prove to be roadblocks that are a drag on the industry. They are not here to promote the craft distillery industry for the greater good; they are involved only for their own personal wellbeing. Our group of industry experts brings years of dedicated service, specialized products, and a true commitment to the craft beverage industry directly to you. One of the many benefits of this group is that we save you one of your most precious and valuable resources, time! Instead of having to spend countless hours of research trying to figure out who is reputable and who you should chose to work with, you now have a “one-stop-shop” of resources and we offer our services on a national level. While we all remain independent from one another, we work closely together as a group to best assist our clients and service their needs. You as the client though are free however to pick and chose which services you are in need of and can select to use any of us that you like. We are an expert resource group with a working knowledge of one another’s expertise and have an excellent rapport with one another. What this means to you is that if you have questions, we have answers. Our expert group is currently comprised of the following industries: Commercial Insurance / TTB Bonding / State Bonding: Aaron Linden – CIC, www.hublinden.com Product Design / Branding / Marketing: Leif Miltenberger, Hired Guns Creative www.hiredgunscreative.com CPA / Planning: Nick Shepherd & Kevin O’Brien, Irvine & Company, LLC www.irvinecpas.com Legal / Alcohol Compliance: Chris Hermann & Bernard Kipp, Stoel Rives, LLP www.stoel.com TTB Consultant / TTB Compliance: Charles Schumacher Architecture / Design / IFC: Mark Ward, Urbanadd www.urbanadd.com Distillery Operations / Product Development / Consultant: Daniel Feldman, Dodo Distilleries In closing, we are all very excited for this opportunity and the ability to bring our years of expertise and dedicated service to the craft beverage industry to all of you. I would encourage anyone reading this, from the start-ups to those of you who are well established, to reach out to any of us with any questions or comments you may have. The beautiful thing about learning is that no matter if you are new to the industry or if you have been in it for a while, things are always changing and there is always something new to learn. Let us be your resource for learning and let’s positively grow this industry together for a sustainable and successful future.
  22. Do you “Have” insurance or do you “Acquire” insurance???? Let us begin by reviewing the definition of each of these words: have/hav,həv,(ə)v/ verb be obliged or find it necessary to do the specified thing. ac·quire/əˈkwī(ə)r/ verb obtain (an object or asset) for oneselfInteresting. The reason I bring this up and write this post is mainly due to the fact that there really are two varieties of distilleries found across this great country of ours (sorry if you are outside of the U.S., you are welcome to keep reading but I am focusing just on America at this point, sorry). There are those craft distillers who “have” insurance and those that “acquire” insurance. In my dealings with folks all across the country, from Alaska to Hawaii, from Maine to Florida and every known single point in-between, I have found that everyone I talk to falls into one of these two categories. Let us start with the “have” to people first. The people in this group seem to be the ones that are a bit put out due to the fact they feel victimized by the insurance process. Hearing things like, “Well!!!! I HAVE to have insurance because the stupid bank/landlord/government/name-some-other –random-entity is MAKING me, otherwise I would just go without!” This is very common with people in this group. The unfortunate reality is that these people either have not been properly educated in the insurance process and simply do not understand its beneficial function to them or …….. they are just crabby and they DO understand insurance but they still hate having to have it. Noted. “I pay all this money every year and never use it! What good is that, I could use that money for other things.” I have heard that so many times that if I had a nickel for each one I wouldn’t be here writing this; I’d be in Belize fishing right now. The first thing to realize is that insurance is NOT a waste of money, it is a way to protect you assets. In all reality insurance is a very safe and reasonably cost effective way to spread and mitigate your single risk against loss across a broader spectrum in exchange for a premium. In fact “insurance” is defined as: Insurance Definition A risk-transfer mechanism that ensures full or partial financial compensation for the loss or damage caused by event(s) beyond the control of the insured party. Under an insurance contract, a party (the insurer) indemnifies the other party (the insured) against a specified amount of loss, occurring from specified eventualities within a specified period, provided a fee called premium is paid. In general insurance, compensation is normally proportionate to the loss incurred. Some types of insurance (such as product liability insurance) are an essential component of risk management. Exactly. “…. an essential component of risk management.” I ask this question: would these same people notice a potential issue within their own distillery that could become a potential hazard or be a risk to their losing everything they have worked so hard to build, yet choose not to fix that issue unless someone was forcing them to? Of course not, most would be proactive and fix the issue and avoid or mitigate the risk. Well the same applies to insurance. Insurance simply cannot be looked at as something that is being forced. Instead, one should realize that insurance is actually there to be a benefit in the case of an unexpected event. Some of these same folks will choose to “self-insure” those aspects that are not being “forced” upon them. Often, they will need to comply with a landlord’s requirements, or get insurance to satisfy a bank loan, but that is where it ends. They will “self-insure” their property (stills, equipment, etc.) as well as their product. What they don’t understand is there is a lot more to insurance than meets the eye. Let us take for instance products coverage; product recall coverage; and liquor liability. What if these same folks are bottling their product and during the course of the process they nick the neck of the bottle, inadvertently sending glass shards into the product? They then send the product out without knowing and someone ingests some of the glass causing injury? Well, in this case, if they do not have products liability or some product recall coverage, they are going to have to foot the entire suit and recall costs out of their pocket. Payment of damages to the injured party; the cost of recalling the rest of the batch that could potentially be affected, etc., could be very costly. This could ruin many new or smaller distillers and potentially cost them their business. This whole situation however could have been mitigated via the proper insurance policy. If they would have had the proper coverage they would have not only coverage for potential lawsuits but they would also be afforded defense coverage for those suits. As well, their product recall coverage could be paid for (up to the limit purchased) and they could stay in business. The same goes for liquor liability. What are the chances someone may be potentially sued for causing someone to become “over served” on their product resulting in a lawsuit? I have seen this happen and even if the party was not found to be negligent the legal cost of proving themselves not guilty can be staggering (pun intended). The rule of thumb is, if you don’t have the coverage, you don’t have the defense. As well, if they choose to “self-insure” their equipment they are then beholden to having to buy it again should a loss occur. Insurance premiums on equipment, when written correctly, can be less than half a cent on the dollar! Well in my book that is a sound investment in the way of protection of your assets. That is simply not “throwing money away”. Given, there are a myriad of coverage’s and one needs to keep things in check as to not become “insurance poor” but again, this is where the education piece comes into play as well as knowledge on the part of the agent. If these folks “have” to have the coverage and choose to buy low and not know or care what is really covered, you have to wonder what other corners are being cut. This brings us to the “acquire” crowd. Oh how I enjoy these folks. These are the folks that get it, or at the very least they want to get it. They are the ones that ask the questions and will actually LISTEN to the answer because they want to know. These are the folks that will take an active role in the decision process and acquire the correct insurance product to fit their needs. The folks in this crowd understand that insurance is not a waste of resources but that it truly is an asset and protection that is there to assist them in their greatest time of need should it arise. The “acquire” group understands the value of what they are purchasing weighed against the cost of doing so. They are effective buyers that are still keeping an eye on their money but know how and why they are spending it and what they expect in return. They also understand that their insurance professional is a trusted confidant, a true business partner that they work in unison with in order to protect and grow their greatest asset. They are not foolhardy with what they will pay in the way of premiums but the dollars they do spend they know are in the best interest of their business. In a way, these folks have reached “Insurance Nirvana”. Often times they don’t necessarily start out that way, although some do. Some are born savvy insurance buyers but most “acquire” this skill over a period of time or through trial and error. I have two suggestions to anyone reading this post. The first would be this; if you are one of the “have” folks but would like to move closer to the “acquire” group without needing to experience the trial and error process, give me a call. I am careful to never say I have seen it all and done it all but I have seen more and done more than most anyone else. I have been doing this for a very long time and can easily lead you to “Insurance Nirvana” via the scenic highway route as opposed to the bumpy and slow dirt road that many insurance folks are on. Second suggestion; if you are in the “acquire” group, kudos to you. You are well on your way to being a happier person, comfortable with who you are and where you are going in terms of insurance and you will have a greater experience in the long run. For you savvy individuals I would still suggest you give me a call. I have the only product available that gives you what you really need (read this post: http://adiforums.com...?showtopic=4883 ) in order to experience true “Insurance Nirvana”. I am here to assist you, guide you, and if you have a great insurance product at a great price then I am even here to tell you, “Good job savvy insurance buyer, you have truly acquired Insurance Nirvana.”
  23. DistillingInsurance

    Hello from West Chester, PA

    Good afternoon all. New Member here. Just wanted to introduce myself. I'm an insurance agent in West Chester, PA and I specialize in the insurance for Distilleries & Breweries. We own DistillingInsurance.com and insure more than two dozen breweries and distilleries in PA, NJ, NY, DE and MD. I've been in the business 8 years now and Craft Beverages have been a passion of mine for many years, so I decided to make that my career, in the form of Insurance. Our agency has the relationships with multiple insurance companies that are very familiar with the craft beverage world. Please call, email or respond to this thread anytime with any questions. I'd love to chat. Happy New Year and Cheers! Kyle Rheiner (@insuranceguyKR) 610-217-8685 kyle@distillinginsurance.com
  24. InsuranceMan

    Distillery on the Moon

    ***** INSURANCE UPDATE ***** ******* 10 / 10 / 14 ********** ** DISTILLERY ON THE MOON ** Picture this if you will, a craft distiller that is making a wonderful multi-year aged product that is as smooth and richly complex in flavor as anything you have ever had the pleasure of having cross your palate; A multimillion dollar facility with one of the most beautiful, multiple story tall, hand crafted stills that you have ever seen; A cache of their distilled products with a value in the multiple tens of millions of dollars. Sounds pretty great right? Maybe it sounds like a goal that you hope to one day achieve for your own business? Now take this real life scenario and place this facility on the moon. Did I lose you there? Did I really say that this facility with all of this value and all of this product was on the moon? Yes I did. However, I am speaking metaphorically. This situation really, truly does exist in regards to a client of mine. They have the facility. They have the beautiful still. They have a large cache of their product built up for current and future demand, but for all intents and purposes their distillery is located on the moon. Well, at least that is what 99% of the insurance companies think. Recently I had the opportunity to work with a long term and very good client of mine in order to arrange for new insurance coverage for their ever growing and expanding craft distillery. There were many issues that needed to be overcome such as the value of their buildings (it is quite a lot), the value of their products on hand (but I am the only person in the country that has that figured out as well, see my post and read the whitepaper here: http://adiforums.com/index.php?showtopic=4883), but the biggest issue was their location. I marketed this account to every single insurance carrier I could find that purports to have a “special craft distillery/beverage” program. I was met almost immediately with declinations or comments of, “You have to be kidding, right?” One underwriter with a company who has a “special program” even told me, “This thing may as well be on the moon! There is no way we would touch this risk.” And on it went. EVERY carrier that I spoke to had a reason to not write this account. From the values being too high on the location (that carrier has a very low limit that they can accommodate “per location”, but they have a cool name that sounds like they want to write distilleries); To carriers saying that they just simply cannot accommodate something of this size; To the location of this clients operation (basically on the moon); To the fact that even though “they” have a special program, they are just under-gunned to actually write this kind of risk; Or that they could not get this past their ReInsurance company; To the fact that they only handle very small to moderate risk size (this has been a problem with a lot of distilleries, their carriers drop them when they actually get too big). The odd thing is, many, many clients fall into this category of size. So what are these clients to do when they either outgrow their carrier or are told that a number of carriers only write “rural risks but there has to be adequate fire protection” (two things that do not go hand in hand)? They are to turn to me! Of course I contacted the carrier that I have my exclusive program through, spelled out the details of the account, the fact that we needed my increasing and progressive valuation for their aging stock on hand, and you know what???? They did not even blink. No snarky comments about the “moon-like” location, no problems with the value, no issues with the lack of fire suppression and even better, they could do it in house without worrying about a reinsurance company riding them over the placing of the account! Within a week’s time we had a bindable proposal that we were able to execute in a timely fashion without missing a beat. The reason I wanted to tell this story is simply due to the fact that, as I have said before, just because an agent or carrier may be able to place a risk does not mean they should. Do your checking prior to buying your coverage. Is the carrier someone that is going to drop you in the second or third year due to your increasing size? Does the agent even really know your business and how to handle it properly? What happens in the case of a loss to your stock on hand? Just because a carrier has a “shiny” name with “craft” or “specialty beverage” or “distillery” in it does not mean they are a perfect fit for what your needs may be. Currently 99% of the carriers in the country use almost the exact same forms and endorsements to write craft distillers but those forms and endorsements in many cases do not provide adequate coverage for your true risk and at that point it just boils down to premium dollars (see this post: http://adiforums.com/index.php?showtopic=5245&hl= ) . In the end though, those premium dollars mean nothing if they are being spent on lackluster coverage. From the very smallest of start ups, to those who have been in the industry for many year that are located on the “moon”, urban or rural, and everyone that is growing and in between, I can assist you. This is not a shameless self plug (well, not entirely) but a true plea from an experienced professional: Do your research, know what you are getting and make sure you have someone with experience in this industry that can go to bat for you should something happen. That is what you are spending your premium dollars for, make them count. From one room “mom and pop’s” to multimillion dollar facilities on the moon, make sure you are protected by someone and by a carrier that fully understands your exposure and by someone who is in this not to make a quick buck, but by someone who is doing all they can to better the industry as a whole ( see this post: http://adiforums.com/index.php?showtopic=5465) . After all, “It is one small step for craft distilleries, one giant leap for distillery-kind”.
  25. Holy cow! This white paper has really stirred up a lot of discussion and questions from many forum readers, posters and lurkers!!! That is great, it is meant to make you think, make you question and make you more aware, so all-in-all it has done exactly what I was writing it to do. I just wanted to address a few key issues that seem to be at the heart of many of the conversations I have with folks in regards to my white paper, the insurance industry and what I am doing differently then everyone else.   I am NOT saying your coverage is wrong or your agent is wrong. A lot of people are now thinking they have been taken advantage of by their past agent or carrier based on the fact that they are now learning that they really may not have been covered appropriately up to this point in time. Others think their agent may have purposefully misled them into believing that they were buying the "best" coverage available. This is most likely not the case. More likely an explanation is that at the time in which many folks had bought their insurance it may have been the "best" thing out there or at least a good attempt. However, I have changed that for ever. What use to be considered the "Market Standard" and the form that everybody used to try to cover things correctly I changed to make it antiquated and something that still can be applied and used, but it is no longer the "best" thing out there. If you are wondering what I am talking about please do review the whitepaper attached to this posting. My product valuation is vastly different from the "standard" used in years past and is still currently being used by a majority of the companies and agents today.   As far as an agent purposefully misleading you, I certainly hope not. What it truly boils down to in my experience, and I have been doing this a long time, is that many agents just don’t know what makes distilleries and their products unique and how to correctly cover them and deal with the intricacies they present. Many agents I have dealt with mean well (I think) but they say things like, "Well, I have written breweries/wineries for a few years so I thought I would get into distilleries." Again, often times they just don’t understand the difference. Also, there are many agents who only write your distillery, or maybe a couple of distilleries, but often times they are generalists who write insurance on everything and anything without specializing or gaining the knowledge needed to really handle or understand your needs. I’m not saying that is wrong, but someone like me who writes distilleries on a national level and who has taken the time to developed a customized insurance program based on real needs seen from YOUR daily working distillery level just knows better as to what is actually going on, how to insure you correctly, as well as has a passion to do so.   Again, I am glad that this paper has had such an impact on folks and that there are that many of you out there thinking about your insurance now and asking questions. I truly feel that aside from your people and your product, insurance is a "top priority" focal point (or should be) for your distillery. Your people and your product are what make you successful but your insurance keeps those investments safe and protects you from losing everything. As always, please feel free to get with me to give me comments, concerns or simply ask questions. That is what I am here for. As well, my offer always stands to give a no obligation analysis of your current insurance coverage. If you don’t know what you have or if you are not sure if you are getting the straight answers feel free to reach out to me at any time on my cell phone at 307-752-5961.