Let's Get Ready to Fire Wall!!!!

[InsuranceMan]

Grandest of Tuesday Mornings to you, dearest reader,

 

               I know that it has been a minute since I have updated you with a TMIT, but things have just been a bit wild in the land of Insuranceopolis.  The quest for good continues, and it just seems busier now than it has ever been, which is certainly a good thing, just time consuming.

               I come to you today with somewhat of a monumental change to the overall insurance landscape that could be impactful, to say the least.  I will approach this issue from two different positions as to not wanting to leave anyone out of the loop.

               For those of you who already have a distillery with insurance in place, good on ya!  You may want to keep the policy you have for the foreseeable future.  I will tell you why in just a moment, just hold your horses!

               For those of you that are just fixin’ to get ready to think about getting into distilling and crafting your masterplan for your distillery, you are going to want to pay attention.

               As you know from reading my past posts, and if you haven’t read them all, shame!  Just kidding, no one is getting shamed in my posts, but do yourself a favor and go back and read them all after you are done here, they have a lot of good information, and some just fun stuff as well.  Anyway, by now you know that insurance markets are cyclical, going between hard and soft market cycles.  In that, it breaks down further into various coverage types and the ease or difficulty of those specific coverages.

               What we are dealing with currently is the grueling realm of property coverage.  Due to several mitigating circumstances that include high brush fire scores, large losses, and just overall wild weather patterns, things on the property coverage front are changing.  It use to be that carriers and their underwriters were more accepting of some well known industry standards.  If you had one common space that was used for production and storage, and your storage was more than 40’ linear feet from your production area, all was good and right in the world.  Vapor dissipates outside of about 25 feet, and the risk of flammable fumes would likely not reach your storage area.  Well, NOT ANY MORE.

               Word just came down from on high that all major ADMITTED carriers (if you don’t know the difference on Admitted verses Excess & Surplus Lines, there is a post on that as well.  I gotch you, Boo!) are now requiring a minimum of a 2 hour fire wall between production and storage.  This is now a MUST HAVE!  It does not matter if your production is 100’ feet from storage, your product has to either be stored behind a 2 hour fire wall, or in a separate location.  This is big news people!!!

               This means that if you have a distillery with coverage currently, you are grandfathered in and you do not need to put up a fire wall.  That is why I said, if you have coverage, you may want to keep it, because if you move the coverage, you may be required to build one.  We all know that they are not giving them away for free, not to mention the time and mess associated with the construction.

               If you are looking to do a build out and start a distillery, well, you best plan on a 2 hour fire wall to store your precious goodies behind because it does not look like this issue is going away for a while.

               What is a 2 hour rated fire wall you may ask???  Well, I am InsuranceMan2.0, not ConstructionMan, but … a 2 hour fire wall generally consists of both sides of the wall being at least double hung 5/8^th inch type X sheet rock, concrete, or masonry.  There are a ton of different designs, materials, batt insulation, etc. that can be used, but I would either look it up or get someone in that is a construction expert to put one up.

               Point being, if you are doing construction currently and your plans don’t have one, you better get one.  If you are looking to move your policy to another carrier, you may want to have this handled prior to moving anything over.  Realistically, in the grand scheme of things, having this added layer of protection is probably just a good idea.  If you had a loss to the production area, which is bad enough, you certainly do not want it getting your stored or finished yumminess too!

               There are other ways to combat a fire wall issue.  A separate building for storage, perhaps.  Maybe a Conex container out back of your building?  There are other creative ways to get around the need for a fire wall in your distillery, but I wanted to make you all aware of what is coming down the pike … actually, what has already come down the pike, so that you can be prepared and not have any surprises when you have wrapped everything up on the construction front, go to get insurance, and W H A M M Y ! ! !  You get hit by the fire wall bus.

               I am here for you, to bring you the most up to date and relevant insurance information, and mainly to protect you, dearest denizens of Insuranceopolis.  If you have any questions, or if you would like to speak with me about this, or any other issues you may be facing, please, shoot me an email, text, give me a call, or flash the InsuranceMan2.0 beacon into the sky!!!  Until then …

 

Stay Vigilant!!!

 

Aaron Linden

a.k.a. InsuranceMan2.0

aaron@roaringforkins.com        or           insuranceman2.0@yahoo.com

307-752-5961

[Southernhighlander]

If bulk alcohol is being stored then just put it outside in storage tanks with the proper UL listing and no firewall is needed.  Of course that is not possible for everyone but where it is possible it saves tens of thousands of dollars.