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Found 40 results

  1. Good Morning Fine Citizens of ADI-land!!!!!!!!!! It is a lovely, but a bit cold, day in Sheridanopolis. I hope wherever you are, you are toasty warm whilst reading this informative installment of “The Tidbit”. Today we are going to look at a coverage that is as important as any that you can purchase, LIQUOR LIABILITY. First of all, let me explain the definition of Liquor Liability. According to the “Insurance Information Institute (I.I.I.)”, Liquor Liability insurance is defined as coverage for bodily injury or property damage caused by an intoxicated person who was served liquor by the policyholder. Wait … WHAT?!?!?! Just by serving someone liquor, you can be sued?!?!?! ABSOLUTELY!!!!! Liquor Liability coverage is essential coverage to have if you are in the business of alcohol, any type of alcohol! If you produce it, sell it, give samples of it, you better have it! This is especially true in states that have adopted any kind of Dram Shop Act/Law. OK, what is a Dram Shop Act/Law???? I am so glad you asked! A Dram Shop Law/Act is a statute which makes a business that sells alcoholic drinks, or a host who serves liquor to a patron who is or appears to be intoxicated, or close to it, strictly liable to anyone injured by the patron, including the patron. Did you know that currently the only states in the US that have not adopted any kind of dram shop law are: Delaware, Kansas, Louisiana, Maryland, Nebraska, Nevada, South Dakota, and Virginia? Every other state has a Dram Shop Act/Law on the books. So, does that mean if you are in any of those states you don’t have to worry about Liquor Liability? NO! Often times, these states still allow for prosecution regardless of if this law was in place. As well, personal injury attorneys rarely care in the case of a lawsuit, and they will come after you. Even if the intoxicated person injures someone else, or themselves, crashes their car into someone or something, or even if they go home and beat up the neighbor or significant other, you could potentially be sued. “But InsuranceMan2.0, we only give away a total of four, quarter ounce samples!!!! That cannot get someone drunk!!!!!” Ah, excellent point dear reader, however … You may not have known the patron was at three other establishments before wandering in for a lovely sample of your wears. Or, perhaps they just slammed a fifth in the parking lot and then came in to have a taste, or get a cocktail (did a little pre-game warm up as it were), and it had not hit them prior to them coming in. Whatever the situation, if you have served them you could have potential problems. Case in point, I work with an establishment that is in the business of selling alcoholic drinks. They are in the business of selling A LOT of alcoholic drinks. In fact, they are the largest bar in a state that I shall not name. A patron came in at 11 a.m. for a Jager Bomb (I’m not judging), paid for the drink with their debit card, and went on their way. Fast forward to 3 p.m. when this gal went to her child’s daycare, retrieved her child, and proceeded to drive through the wall of the daycare. Yeap, true story. Sad but true story. As it turns out, the establishment that I represent was not the first stop of this gal’s morning, nor was it the last. At each place she stopped, she had at least one Jager Bomb, paid for it with her debit card, and moved on. In the lawsuit that ensued, her paper-trail of where she had been and the drinks she consumed was easy to establish since they all were transacted through her bank statement because of the debit card. Her lawyer then named each of the 8 establishments in the lawsuit citing that they each in someway contributed to her intoxication. Guess what, all 8 of them were successfully sued, and had to split the penalty 8 ways. I am not saying that this is ever going to be a situation that you may be involved in, but I will tell you that if you don’t have liquor liability coverage then you don’t have liquor liability coverage. Liquor liability coverage is almost always excluded under your general liability coverage if you are in the business of selling or profiting from alcohol, period. So, without purchasing a separate liquor liability coverage, you have no coverage. That means that any suit and resulting claim would come out of your own personal pocket, or that of your business. Either way, that is not good. Furthermore, an often-overlooked aspect both General Liability and Liquor Liability is the fact that they both provide for defense coverage. Yessir! If you are sued, no matter if it is a real case of negligence, or a frivolous lawsuit, your policy provides for the cost of defense. Yeah, Buddy! I have seen people sue over the craziest of things. Things that have no validity what-so-ever. I don’t know if you have hired an attorney lately, but the prices are not going down! Even in the case of a frivolous lawsuit, it could cost you tens of thousands of dollars to prove your innocence. Better that money and the crack staff of attorneys comes out of the insurance carriers’ pocket as opposed to yours. The long and the short of it is this … Liquor Liability is something you should have, you need to have, and something that you should want to have. Pair this with making sure that you and all the servers are TIPS trained, and you should have very little to worry about. Heck, most carriers only charge between $750 and $1,000 a year for a standard liquor liability policy. That would barely get you 2-3 hours of a lawyer’s time! Of course, that pricing can be impacted by various factors such as a full-blown cocktail room that is selling $1.2 million a year, but for a normal tasting room that is either giving out free samples, or making a decent profit from tasting charges, it should not cost you more than that. And for that $750 - $1,000 you have the piece of mind of knowing if you are sued due to a liquor situation, you have $1,000,000 worth of coverage to take care of any claim, defense costs, and crack staff of lawyers. Now, that is something that should make you sleep better at night. Until next time my friends, STAY VIGILANT, Aaron Linden a.k.a. InsuranceMan2.0 InsuranceMan2.0@yahoo.com 307-752-5961
  2. Good Morning All, Today I am coming to you from the frozen land of Sheridanopolis!!!! -17 here this morning, and Insuranceman2.0 is wanting to pour coffee on his feet! I wanted to take this opportunity to inform all of you that I will be in attendance at the ADI Expo this year, and I hope to see all of my vigilant friends at booth 434!!!!! I am very excited to attend the convention and expo for the 5th time in a row and cannot wait to have the chance to meet many of you in person for the first time. If you are attending, please make sure to stop by, say "hi", and get all of your insurance needs taken care of! Here is an interactive map of the expo floor for your perusal: https://shows.map-dynamics.com/adi2019/ . Make sure to highlight and click on booth 434!!! Until next time my friends ... Stay Vigilant, Aaron Linden a.k.a. InsuranceMan2.0 insuranceman2.0@yahoo.com 307-752-5961
  3. Happy Tuesday my ADI friends, In today's installment of the “Tidbit”, we are going to discuss something you are going to need to know about shortly. The difference between a “Standard Market”, and an “Excess and Surplus Lines (E&S)” market. This is also commonly referred to as “Admitted”, or “Non-Admitted” markets. First of all, why are we even talking about this?!?!?!? What does this have to do with anything?!?!?!?! It’s OK, breathe … you are lucky I am here to save the day … I will explain everything. In the spirit of transparency, I wanted to make you aware of what is happening in Insuranceopolis! In a nutshell, or if you prefer, in a reader’s digest version … well … actually … that just does not exist as the nuances of these definitions is rather deep, complicated, and convoluted to say the least. But fear not dear reader, I will do my best to break it down in a succinct manner for you here. To be honest, the easiest way to thing of this is “lower premiums vs. higher premiums”. Well, that is what many believe, although in some cases that may not be true. But for us here, for the ease of discussion, it will hold true here. A “Standard Market” or “Admitted Carrier” is an insurance company that is licensed to do business in the state that it is operating in (so if they are writing coverage in 50 states, they hold 50 licenses, one in each state). They must conform to various regulations and filed rates for each individual state and classification of business, and a big difference is that they pay into what is known as a “State Guaranty Fund”. “OH DEAR SWEET INSURANCE TERMINOLOGY!!!!!!!!! WHAT IS InsuranceMan 2.0 TALKING ABOUT!?!?!?!?”, you may be thinking. Hold on to your snifter (or glass of choice) and relax, I will explain. A state guaranty fund is basically a fund set up in each state to protect insureds from defaults on payments of claims in the case that an insurance company becomes insolvent. Basically, it protects the insureds of any carrier licensed to do business in the state in the case of catastrophic loss whereby the carrier may throw up its hands, declare bankruptcy, and say, “So sorry, we are teary on the inside, but you get no money for your claims, we are all out of funds.” NOPE!!!!! The “fund” makes sure that money is available to pay the claims in a situation such as this. OK, now that that is over, lets talk about another big difference, MONEY. Admitted carriers, or “Standard” carriers take on risk, don’t get me wrong. They just do it in a way that allows them to assess lower risk, higher reward business that makes them quite profitable. The ability to assess the amount and level of risk, weighed against the premium charged, allows these carriers to still take on legitimate risk, but at a much lower level. These carriers are kind of like the nerdy kid in class that would assess every possible outcome of a situation and only get involved if they knew that they were almost 99.99999999999999% to come out on the winning or “not getting hurt” side of things. With that said, “Excess & Surplus Lines”, or “Non-Admitted” carriers are quite the opposite. These folks are like the cool risk-taker kids we all knew growing up. These are the folks who still fully assess the risks associated, but look at it and say, “Y’all hold my bourbon and watch this!” These are the folks who understand risk fully as well but understand that there are riskier business out there that still need insurance. These folks fill that void. A big difference is that the E&S folks are usually only licensed in one state but operate in many or all of them. Heck, they don’t even have to be licensed in the US. Ever heard of Lloyd’s of London?!?!?! Another big difference, these Maverick types don’t pay into any kind of guaranty fund. “Guaranty Fund … We don’t need no stinking Guaranty Funds!!!” Man, who doesn’t like hanging out with these folks as opposed to the nerdy “Admitted” folks?!?!?! Well … just like in real life, hanging out the nerdy safe folks is just that, pretty safe. Hanging out with the risk takers, well, sooner or later its gonna cost you! So, what do I mean?!?!?! I have no idea, I lost my superhero train of thought, dagnabit! HA, JOKING, InsuranceMan 2.0 never losses his super-mind! What I mean is that the nerdy admitted carriers do take lower risk clients on so they can afford to charge lower premiums and still remain profitable come the end of the year. The Super cool risk-taker non-admitted kids take on cool well assessed risks, but if something goes wrong, and things associated with higher risks can go wrong in bigger ways and more often, so they have to make you pay more so that they too are profitable at the end of the year. Also, since they don’t pay into the guaranty fund, if things go real bad and they become insolvent, there may not be money to pay your claims. I will say though, I have personally never seen this happen, but it could. Think of it this way, your “Farm”-insurance companies do homes, autos, some little businesses, etc. Pretty innocuous stuff. They will not insure things like a running-back’s legs for $12.4 million, or a distillery for that matter. Yes, car accidents happen, and fires do happen, but surprisingly very rarely. Again, low risk, high reward for the nerdy kids. Football players however, they get hurt all the time on the field. AH, here comes the cool risk-taker kid! Again though, the “Farm’s” won’t even consider something like this, so those that will (like Lloyd’s), know there is a need, but they are going to charge a much higher premium due to the amount of risk, and slightly due to the fact that they know no one else will take on the risk. FINE!!!! I will get to the point of all of this, trust me, the build up is worth the wait. As you know if you read my post, “The Times, They Are a-Changin’”, the times are truly a-changin’, over the past several weeks there has been a shift in the insurance marketplace. Standard carriers that would look at and write distillery insurance have been pulling back. They have been strengthening underwriting requirements and guidelines that they did not have before. Basically, the insurance market is cyclical and always has been. Standard carriers will consider certain risks and be aggressive and seek them out for a period of 4-7 years, but then “IT” happens. “IT” being that there is a pullback, a reduction of risk that can last for 4-7 years as well. “IT” happens with hotels, contractors, and on and on the list goes. We are seeing this shift now as well with distilleries and the standard carriers available that are wanting to actively write the insurance for them. Many (most) are now looking at distilleries as a “riskier” risk and pulling back on providing insurance for them. So, what does that mean for those of us in Insuranceopolis??!?!?! It means that we must start preparing. It means that we are going to see this shift start to affect all of us in regard to premiums and availability of coverage with standard carriers. Fear not though fine citizens! It is InsuranceMan 2.0 to the rescue, and I have the “cool risk-taker” kids in tow! I will continue to approach the standard nerdy kids with distillery business, but I wanted to prepare you in advance that these opportunities may be fewer and further between. Out of 22 distilleries submitted in the last few weeks, the nerdy kids have declined all of them. That is too bad for them, because this is not a risky business. Distilleries are so highly regulated, by not only local/state/and federal authorities, but by yourselves as well! These businesses are you heart and soul and you would never do anything “risky” that puts your work and business at risk. The nerdy kids don’t see this currently, they think it is a risky risk that they don’t want to take a risk on. That’s ok, I am here with the cool risk-taker kids who will take a risk on you risk, it just may cost a bit more for a time. I will continue to do the very best job and obtain the lowest premiums for all of you, fine citizens! Again, in the spirit of transparency, I just wanted you all to know where things are and where they appear to be headed, so you are not blindsided. I will always advocate for you and we will prevail!!!!!!!! We will make them see that this is a good risk, and we will win them over. If you don’t believe me, y’all hold my bourbon and watch me do it!!!!!!!!!!!!!!!! Stay Vigilant, Aaron Linden a.k.a. InsuranceMan 2.0 insuranceman2.0@yahoo.com 307-752-5961
  4. jbdavenport1

    Inusrance

    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!
  5. Happy Thursday Morning ADI Citizens, Today’s “tidbit” comes a few days later than normal as I am sure you noticed. Well dear citizens, that is due to the fact that I, InsuranceMan 2.0!!!!!!!, have been battling the forces of insurance evil nonstop over the course of the last few days. As the sage balladeer Bob Dylan wrote back in 1964 (a bit before my time), “The Times They Are a-Changin’”!!!!!!!!!!! As you all well know, I am the national face of insurance protection for distilleries throughout this great land of ours. Over the years I have worked tirelessly with several national carriers to develop and improve upon specialized insurance coverage in order to vigilantly protect you and your distilleries, my friends! However, the greatest evil that one can befall upon another is (DAH, DAUGH, DUNNNNN!!!!) betrayal!!!!!! Ever superhero has their weakness, as we all know. This is the irony and dichotomy of superpowers. With much strength must come debilitating weakness, albeit, the strength much outweighs the weakness the majority of the time. So, what is my weakness you may ask?!?!?!?! Well, it goes by several different names. But, I plead with you, remove any children from the room if you are reading this aloud, as the next portion could cause them the following: great distress; nightmares; stomach cramping; nausea; tennis elbow; muscle pain; dizziness; uncontrollable screaming; dry mouth; mental anguish; sobbing; uncontrollable disgust; trench mouth; jungle rot; water on the knee; allergic reaction; and, yes, diarrhea!!!!!! Alright, here we go, you have been warned. Some call it, “The Company” (GASP!!!). Others may call it, “Underwriting Guidelines” (VOMIT!). One of the worst names it goes by, “Actuaries” (FALLING TO KNEES WITH ONE ARM OUTSTRETCHED TOWARDS THE HEAVENS!). And, possibly the very worst name that it goes by, my greatest weakness, “Underwriting Requirements” (FALLS TO FLOOR, CONTORTING IN PAIN!!!!!!!!!!!!!!!!!!). What am I talking about?!?!?!? What is it that has sickened and weakened me and caused me to seek respite in my secret lair of insurance solitude!?!??!?! It is the fact that one of the national carriers that has been specializing in distillery insurance, one that I trusted and partnered with; One that I groomed and treated as my very own; One that I helped, took in and trained up in my own image has betrayed me!!!!!!! This trusted friend and partner, now, after our beautiful relationship has come out with new “Underwriting Requirements” that state that, “No finalized product, whether bottled; barreled; in totes; or any other means of storage” can reside in the same building as the manufacturing operations. In lay terms, you cannot have any finished product in the same building as your still. So, what does that mean?!?!?! It means that this carrier, who has been so good to work with, who has been by my side in the insurance injustice batter for so many years, has now gone to the darkside! They have chosen to use their powers for evil, instead of for good. They are essentially saying that they still want to write distillery insurance, but only on distilleries who have a separate building to store their product in, with defensible space separating the buildings. H O O E Y!!!!!!!!!!!!!!!! What they are really saying is that they don’t want to work with you fine people anymore, but are to cowardice to say so. What they are saying is that they are only willing to consider 2%-3% of the overall distillery business, since almost everyone I know in the distillation business has product stored in the same building as where they manufacture their product. Oh, I know, I know what you are thinking. You are thinking, “Well, it is probably just a clarification error! They probably mean it cannot be in the open in the same building. They probably mean they want to see a fire wall, a separate room in the same building that stores the product.” Incorrect, dear reader! I clarified this until I was blue in the face, it must be a completely separate building with defensible space. So, what does that mean, “defensible space”? According to FEMA, “Defensible Space” is, “… an area around a building in which vegetation, debris, and other types of combustible fuels have been treated, cleared, or reduced to slow the spread of fire to and from the building. Information about local vegetation, weather, and topography is used to determine the Fire Severity Zone of an area, which can help determine the most effective design of a defensible space. A defensible space is one of the most cost-effective ways to protect a building from a wildfire and can often be created by the property owner.” The issue here is that it is never clearly defined. Is it 15 feet, or 50 feet?!?!?!?!! No one will commit to a distance that is acceptable. (Collapsing to the floor again out of frustration and crabbiness). What does all this mean to you, sweet ADI-goer?!?!?!!? It means that the market is tightening. It means that underwriting is getting tighter which means coverage may become more difficult to procure through a “standard market”, and coverage may be more expensive as it may have to be provided by an E&S carrier. It also means that there could be more cost involved in having to store your products off site just to satisfy some evil, menacing insurance actuary!!!!!!!!!! NOOOOOOOO!!!!!!!! Fear not though!!!!!!! Again, with the bad always comes the good. One door closes, another door and some windows open!!!!!! Although this carrier of which I speak, who shall remain nameless (let’s just refer to them as “Crudtastic the Despicable”) is tightening things up, there are still carriers who have remained stalwart. I am even working currently on a top secret project that will be beneficial to all who participate, something quite exciting that the distillery insurance world has never seen the likes of!!!!!!!! I implore you to stay tuned, as it may take some time, but oh … it will be something to behold!!!!!!!!!!! In conclusion, fear not fine citizens, I am still here to work with and defend you on a daily basis. I have many wonderful carriers that I still work with and who are doing good works on our behalf, so if you have needs, I can still solve them. I never lumped all of my eggs in to one basket as the saying goes. I do ask one thing of each of you though. In assisting me in pleading our case, I would like each of you out there to let me know in the comments section, where do you store your finished products, in whatever type of vessel??? Are they stored in the same building as your manufacturing space, or do you have a completely separate building with defensible space? Your participation in letting me know, so I can use the information to defend us and continue to fight evil-doers is much appreciated. Until next time ….. Stay Vigilant, Aaron Linden a.k.a InsuranceMan 2.0!!!!!!! 307-752-5961 InsuranceMan2.0@yahoo.com
  6. Good Morning ADI Citizens! In today’s installment of the Tuesday Morning Insurance Tidbit the topic de jure is Local Insurance Agent vs. National Insurance Agent, i.e. InsuranceMan 2.0. For many, your distillery business is your heart and soul, your life. You have put everything (or most everything) you have into building your business, making amazing, artistically crafted products. You spend many of the hours of your week at your facility, and when you are not there, you are thinking about being there. Something this important in your life deserves the best in the way of protection. I speak to dozens of people just like you every week and have for the past 7 years. Inevitably I am asked a particular question at least once a month. What is the question you wonder? Well, the question is this, “Shouldn’t I try to find a local insurance agent to handle my distillery insurance?” Ah, the age-old question! Because I am an honest and just Insurance Superhero, I will address why dealing with a local agent is something people consider. First of all, they are somewhere in your town/city/area, so that could be something. Second, and I hear this all the time, “It helps stimulate the local economy.” Ok, I can kind of see that I guess. Finally, maybe you know the guy/gal and your kids play soccer together or the local agent is you brothers, step-aunt’s niece’s cousin whose best friend’s dog-goomers husband sells insurance, or some other such relationship. Nice, all reasons and justifications I hear as to why people may look for a local agent. Now, let’s speak to the adverse side of dealing with a local agent. Just because they are in town or the area does not necessarily make them more accessible or mean they will be stopping in to your business every time you have a question. In fact, more often than not, people that had been dealing with a local agent, and then moved to me have told me I am more accessible via email, text, and by them calling me on my cell phone than their local agent ever was. Many have told me their local agent was a “hit it and forget it” insurance salesperson. Meaning, they sold them a policy and then never spoke to them again. SAD!!!!! Second, in regard to the economy, although the insurance agent is paid by your business it may not be what you think nor have the economic impact that is perceived. If a policy costs you $5,000, that is not going into your local economy. Agents are actually paid only a small percentage of the premium, the rest goes to the big faceless insurance entity located in some far away land of actuaries and guys that look like they just stepped off the Monopoly box, who light their cigars with $100 bills. SCARY! Finally, just because you may know, or kind of know someone that schleps insurance for a living does not obligate you to having to work with them. We have now arrived at my favorite part of the discussion; Why should you consider a National Insurance Agent, i.e. InsuranceMan 2.0? Grab yourself a nice lowball of your favorite spirit and get comfy, this portion could be L-O-N-G!!!!!!! Just kidding, I will keep it short and sweet even though I could go on for days. One reason to work with me is that I am incredibly responsive and pretty much accessible 24/7 via cell, email, and text. Don’t believe me?!?!?!? Ask around and you will find out quickly that I respond to folks at all hours of the day and even on weekends. Unless I am up in the mountains and have no cell reception, I am accessible dang near all the time. That is partly what makes me so Superhero-ish! Next, think of this scenario: God forbid, but pretend that someone contracts a rare disease. There may be a slew of local doctors and hospitals in the area, but that does not mean they will know how to treat the person. The first thing that person would do is jump online and find out where and who in the country specializes in this kind of treatment. They would do everything in their power to seek out the very best, most experienced person they could find to assist them with their needs, right?!?!?! I know I would. Well, why should your distillery insurance be any different? Why would you choose to work with someone just because they happened to be close to you? What experience do they have in writing distilleries? Do you really want to be their Guinea Pig?!?!?!!? Having them experimenting on your policy, cobbling some coverage together, only to find out in the time of a claim that it is not covered because they didn’t know what they were doing? NO!!!!! You would seek out a specialist who knows what they are doing, someone who has been doing it for a long time and has successfully worked with and assisted hundreds of similar clients! You would not just want to work with the person that schleps insurance, you would seek out an insurance Superhero. Someone like … me! InsuranceMan 2.0!!!!!! Here, let me save you the work. You can contact me at Insuranceman2.0@yahoo.com, or via PM here on ADI, or by call or text at 307-752-5961. There, that was easy, wasn’t it? Now you don’t have to spend time looking for someone who can assist you with your distillery insurance needs. You can use your extra time to come up with that new mash bill. Or maybe whether to macerate, or use a basket, or place botanicals strategically at different levels in the column. So much extra time and so many things to consider! You’re welcome! So, until next time my friends … Stay Vigilant, Aaron Linden InsuranceMan 2.0
  7. Happy New Year fellow ADI-ers, In today's installment of the "Tidbit", I just wanted to wish you all a happy and prosperous new year and thank you all so much for this past year as well. You all have truly made 2018 a remarkable year and I am looking forward to a grand 2019 with all of you. Stay Vigilant, Aaron a.k.a. InsuranceMan 2.0 307-752-5961 InsuranceMan2.0@yahoo.com
  8. Dear ADI forum, I know this is coming to you on a Wednesday, not Tuesday, but Christmas happened to fall on Tuesday and I had been spending a glorious time with family and friends. In today's installment of the "Tidbit", I just want to wish you and yours a very Merry Christmas, a happy and prosperous New Year, and Happy Holidays ... how ever you may believe or celebrate. In my world I don't find any holiday greeting offensive, I believe it is just a nice time of year for everyone to come together and reflect on the value that your family and friends bring into your life each and every day. I wish we all took time to reflect on this aspect of our lives more. So, from InsuranceMan 2.0 and my family to yours, Merry Christmas, Happy New Year, and Happy Holidays to all of our friends of ADI that we have had the opportunity to get to know, and for those of you that we have not gotten to know as of yet ... 2019 will be the year of us getting acquainted! Stay Vigilant, Aaron Linden - aka InsuranceMan 2.0 307-752-5961 InsuranceMan2.0@yahoo.com
  9. Good Day Fellow ADI’ers, Yes, today’s “Tuesday Morning Insurance Tidbit” is being brought to you on Wednesday. As the holidays approach at a fast pace, sometimes InsuranceMan 2.0 becomes a bit busier than normal! Besides the normal day-to-day business of keeping a vigilant and watchful eye out over all of you, to the ongoing battle of fighting insurance injustices far and wide, to getting ready for the holidays, even I, with my incredible superpowers, sometimes cannot keep up with it all. Kudos to all mortals out there who keep on keeping on during this time and stay up to date on their tasks at hand. I applaud you, you are the true superheroes here! Now, on to today’s Tuesday Morning Insurance Tidbit! This tidbit will be short and sweet … You’re welcome! The topic at hand is … Da Da Daaahhhhhhh ….. “State Bonds”! It used to be that all distilleries needed to have a Federal bond, also known as a TTB Bond. As you are all aware however, that requisite went away here about a year ago, and is set to continue until the end of 2019, at which point the Government will make a decision as to whether or not to continue this exemption or re-implement it. Until then however, many states still have bonding requirements. From “Sales and Use” bond requirements, to “Alcoholic Beverage” surety, to “ABC/1-2-3/3-Tier” bonds, most states are going to require some type of bonding from your distillery. Also, keep in mind, that if you are looking to expand your territory from your home state to other states, you will most likely be required to provide a state bond to the new state you are going to conduct business in. Does bonding scare you?!?!? Does it keep you up at night and haunt your dreams?!?!?!?! Do you find yourself breaking out in a cold sweat when you nervously contemplate how difficult it is going to be to get a bond?!?!?!? Do you wonder if they will want all your most personal and private information or take your first born or your still as collateral?!??!?! Well, have no fear … InsuranceMan 2.0 is here!!!!!!!!!!! I can assist you with all of your state bonding needs (as well as your Federal TTB bonding as well, if you are withdrawing more than $50,000 in tax paid spirits a year). I have this down to such a science that all we really need is your name, address, bond amount and state, and I can have the bond done, issued, and out to you within an hour. Bada-Boom! Yes, you heard me correctly, in less than an hour. Many of the state bonds, or sales and use bonds require a limit of anywhere from $1,000 to $5,000. For bonds such as these, not only can you have them in an hour’s time, but they only cost an annual premium of around $100. Yes, you read that correctly, $100. Again, you are welcome! So, if you are uncertain of the state surety you surely and certainly seek, seek surety no further than the simple certainty I can surely provide for your surety needs. Until next time, dear reader … Stay Vigilant, Aaron Linden Aka InsuranceMan 2.0 307-752-5961 InsuranceMan2.0@yahoo.com
  10. 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
  11. 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
  12. 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)
  13. 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
  14. 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!!!!!
  15. 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
  16. 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
  17. 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
  18. 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
  19. 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)
  20. 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
  21. 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".
  22. 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
  23. 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
  24. 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.
  25. 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."
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