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Insurance companies taking notice


John McKee

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Good morning,

As many of you know, I have often championed the cause of making our industry stronger from a certification and self-regulating perspective. My concern, often stated, is that people in the regulatory and insurance agencies were going to start taking notice of the issues in our industry, with respect to fires, explosions, etc.

Today, we received notice from our insurance company that as of December of this year they will no longer carry property insurance for micro-distilleries. When questioned, they said it was because of the explosions and fires the industry has had in the last year. FYI, the company is Nautilus Insurance, out of AZ. https://www.nautilusagents.com/. We have provided HAZOPs, Design sign offs from P.E.'s on our equipment, fire suppression, and procedures and that was still not enough to change the decision of the insurance company on this issue.

We are now forced to find a new insurance carrier for property insurance because our industry is growing too fast, with too little proper care and concern for the impacts incidents at a few distilleries can have on the industry as a whole.

We'lll find a new insurance carrier. However, I do feel that this is the first of many issues that is going to befall our industry in the coming years. Its time to grow up.

I'm contacting Bill today and I'm going to push hard for ADI to step up to this issue and own it. I encourage those of you with similar concerns and experiences to join me. We can all do better.

Best,

John

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In most towns around here big enough to have their own codes they don't allow open flame steam boiler systems for anything on a new install in what they term as a 'semi-hazardous' environment. Personally, the actual distilling operation needs to take place in a walled off area away from any alch. storage area or heating systems. And never run without someone attending the operation. The 1 person operation who does distilling while working the filling machine in another room shouldn't be allowed without electronic monitoring of the still and distilliing area. Not practical, but if that's what it takes to keep in business, so be it.

Side note--Due to several Amish horse/buggy accidents with vehicles in the area a local carriage ride company, used for weddings and events, went out of business. The insurance tripled and they simply couldn't pass that much cost along.

It would have been cheaper to use an electric golf cart setup pulling the buggy as the insurance would have rated on the golf cart. So the horse was the dangerous part of the setup, not the fools on the road, according to ins. comp.....go figure.

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May I suggest you contact PEERLESS INSURANCE. Our agent in New York is Steve Stork, STORK INSURANCE, Penn Yan NY.

Tom's observations are spot on. It is time for the small distillers to seriously consider operational procedures. It will not be long before either government agencies or insurance companies will step in with their own set of requirements, drawn up by underwriters and bankers and elected officials with no distilling operational experience. Unfortunately there are too many "seat of the pants" operations coming on line and not fully cognizant of the inherent risk of dealing with alcohol.

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Again I think it is an admirable idea to develop some sort of protocol that can be a blueprint for safety, but it is fraught with potential liabilities. Especially because of the varieties in scope of operations, equipment differences, facility variables, personnel qualifications, storage systems and procedures, and on, and on...... That being said I do believe there should be a vapor sensor requirement and protocol for an alarm, and still shut down procedure when the alarm sounds.

Regardless of any "pre-training", what happens when somebody fails to tighten down a door clamp or a valve pops off? Exactly what happens before the regulations and procedures were put in place. The vapor escapes and if not vented and of sufficient volume, a fire may well occur. If there is nobody watching the still, you have yet another disaster.

How many people reading this go to a gas station, put the fuel nozzle into their gas tank, squeeze the handle full open, click the latch on the handle, then go inside the store to shop? If you do that, no amount of safety training is going to save you. If you don't do that, we can mitigate catastrophic fires in micro-distilleries.

What we really need are 3 rules of thumb that everybody follows:

Never leave the operating still unattended

Never leave the operating still unattended

Never leave the operating still unattended

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