general liability home brew insurance

Discussion in 'Homebrewing' started by MisterClean, May 29, 2013.

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  1. MisterClean

    MisterClean Initiate (0) Jan 11, 2008 California

    I am on the board of a home brew club and we are interested in getting liability insurance for our monthly meetings and about 10 brew days a year on our 45 gallon brew system. Anyone aware of companies that have insured home brew clubs?

    Thanks.
     
  2. hopfenunmaltz

    hopfenunmaltz Meyvn (1,491) Jun 8, 2005 Michigan

    Try contacting the AHA, they have looked into this.
     
    inchrisin likes this.
  3. billandsuz

    billandsuz Devotee (426) Sep 1, 2004 New York
    Industry

    you would definitely want to set up a meeting with an insurance broker. that wouldn't be the most complex insurance coverage in the world, but it isn't an off the shelf product either. agents are typically limited to what their company provides where as a broker can negotiate and shop around for something that fits your needs.
    if I had to guess, you'll end up with a non profit liability policy with some riders for the alcohol. then again, ask an a broker for sure and let us know.
    Cheers.
     
  4. GreenKrusty101

    GreenKrusty101 Crusader (749) Dec 4, 2008 Nevada

    Might want to look into forming an LLC/501(3)(c) instead...maybe not
     
    nozferatu46 likes this.
  5. DrewBeechum

    DrewBeechum Meyvn (1,316) Mar 15, 2003 California
    Society

    Even for the insurance, you'll want to be a 501 c at least. Check the AHA website for more information, but its not easy and not cheap.
     
  6. MisterClean

    MisterClean Initiate (0) Jan 11, 2008 California

    We r a 501 (c)(5) recognized in CA, but not by IRS. That's a bit more costly going through the feds.

    Got one quote at 2,250/yr, but that's not reasonable for our club.
     
  7. AlCaponeJunior

    AlCaponeJunior Poo-Bah (2,118) May 21, 2010 Texas

    Just out of curiosity, can you describe your club, its activities (and possible risk factors), place of meeting, membership, annual dues etc? A link to you club's webpage perhaps? I'm just curious as to the types of parameters that insurers might be interested in when providing you a quote. I am not in the insurance business, BTW. But if something like this ever came up in the future for a reader of this thread, it might be interesting. Cheers!
     
  8. GreenKrusty101

    GreenKrusty101 Crusader (749) Dec 4, 2008 Nevada

    A LLC can limit liability much like liability insurance. The filing fee and annual updates are usually less $.
     
  9. reverseapachemaster

    reverseapachemaster Initiate (172) Sep 21, 2012 Texas
    Trader

    What are you trying to limit liability against? Who are you looking to protect? How broad does coverage need to be?

    If you are looking for insurance on the organization then you need to know what the organization's liability is beyond the LLC. The LLC should limit your liability up to the assets of the organization. After that, there's nothing else to get out of the organization so you are basically insuring a payout you wouldn't otherwise pay out. Of course, if the organization has substantial assets (and it sounds like that is not the case) then insurance may be appropriate. The other side of that coin is that if the LLC's members (not necessarily the club's members) are not respecting the legal fiction between their personal affairs and the LLC's affairs then the LLC's veil can be pierced, so that may be a reason to obtain insurance on the LLC to provide a deep pocket to bail out the LLC members.

    If you are holding club events at member homes or some third party business then the LLC will not shield the landowner (or tenant) from premises liability and the LLC's insurance probably won't apply to the landowner, either. The landowner's property insurance may or may not cover injuries related to the operation of another entity on the premises.

    If an LLC member causes personal injury to another person then he or she can be personally liable for the injury in addition to the LLC. Again, insurance on the LLC may not cover the member for his or her personal liability to the injured party.

    Insurance may or may not be a good fit for your organization based on your needs.
     
  10. VikeMan

    VikeMan Poo-Bah (1,883) Jul 12, 2009 Pennsylvania
    Society

    Just curious, but under this scenario, isn't there a risk that the LLC's insurance wouldn't pay out? IOW, if the insured LLC is determined to be a sham, would the insurance company have to pay for negligence (or whatever) on the part of the 'real' people?
     
  11. GreenKrusty101

    GreenKrusty101 Crusader (749) Dec 4, 2008 Nevada

    When homebrew clubs routinely need to be LLCs and/or have insurance it's time to stay home and RDWHAHB
     
    AlCaponeJunior and clearbrew like this.
  12. DrewBeechum

    DrewBeechum Meyvn (1,316) Mar 15, 2003 California
    Society

    The problem is of course that whenever alcohol gets involved, everything about liability goes sideways. A drunk homebrewer from your club causes an accident on the way, you can bet bottom dollar a lawyer from someone's insurance company is going to come calling.
     
  13. reverseapachemaster

    reverseapachemaster Initiate (172) Sep 21, 2012 Texas
    Trader

    Maybe. When a corporate veil or LLC veil is pierced, it doesn't relieve the organization of liability, it just allows the personal assets of the owners to be reached as well. Whether the insurance policy would stay in effect in that scenario would depend upon the particular facts of the malfeasance and the policy language. There's also the marginal utility analysis of the insurer to pay the claim versus litigating whether the policy covers the particular acts of malfeasance. If other insurance policies can be implicated, such as a homeowner's policy, that insurer will definitely try to keep the LLC's insurer involved to spread risk.

    Whether the malfeasance is contractual or tort-based, any plaintiff's attorney is going to file suit against the LLC plus any individual members that are implicated (if not all of them). Even if the veil is pierced the LLC is almost certainly going to be on the hook. If the insurer can be put on the hook to pay under the policy then it's going to make life easier on the members who are also on the hook because it is easier to get a cash payment from the insurer than try to place liens on some member's house, car, etc., if the state's homestead law even allows it. The LLC's insurer might try to sue the responsible members for contribution but the insurer will have just as difficult of a time recovering from the member's property.
     
    billandsuz and VikeMan like this.
  14. simchuck

    simchuck Initiate (0) Jun 17, 2014 New York

    I am a little late to the game on this thread, but seems to be some knowledgeable posters that can hopefully comment on my situation.

    My club is small (~25 members) and we are a de-facto non-profit in NY, but not registered with the IRS. We have our all attendees to our meeting sign a waiver at each meeting, but we don't have any insurance. The new insurance sponsored by the AHA is reasonably priced, but still a stretch for us. The club itself operates on a shoestring.

    I am curious what liability we have for the club, the individual board members, and the venue that hosts our meetings/events. Our events so far consist of monthly meetings, a few "carpool" events to local breweries, and two annual group events (Big Brew, and our club Oktoberfest).
     
  15. PapaGoose03

    PapaGoose03 Poo-Bah (2,633) May 30, 2005 Michigan
    Society

    I have a feeling that everyone here is over-thinking this question. The OP did not give a reason for why the club wants to get liability insurance, but I'm guessing that the most common reason for wanting insurance is that when a homebrew club goes off-site for a brewing demo that the host location will ask for a certificate of liability insurance as evidence that coverage is available in case someone on the host's premises might trip over something that belongs to the homebrew club was left in a bad place and injures themselves. I think it's becoming pretty common for hose locations to ask for this certificate of insurance, even for what might seem like a minimal exposure, so a club has to have a policy in effect to be able to provide this evidence of coverage.
     
  16. simchuck

    simchuck Initiate (0) Jun 17, 2014 New York

    You are suggesting that there really is no liability issue, and it is more a matter of meeting the somewhat arbitrary insurance requirements of a hosting venue. Does the world really work that way? If someone gets injured during or as a result of one of our events, I expect there are a few lawyers out there who would be willing to make a case.
     
  17. PapaGoose03

    PapaGoose03 Poo-Bah (2,633) May 30, 2005 Michigan
    Society

    No, I'm suggesting that if a homebrew club is going out into public places for brewing demos, etc., that the club should have liability insurance. The exposures of what might happen in the way of an accident are minimal (presuming that there is no serving of homebrewed beer to the public since it violates all homebrew laws and is a whole other topic for liquor liability coverage), but accidents do happen. A trip-and-fall by a customer of the host over something left in the wrong place by a club member on the host's premises, or perhaps an exploding LP tank can cause personal injury and property damage to customers or the host's property, but what are the odds? Thus my statement that the exposure (probability) of having an incident is minimal.

    I'm also saying that host operators are within their rights to ask for (or require) evidence of liability coverage from the homebrew club (it's called a Certificate of Coverage) to protect themselves against such an accident that may be out of the host's control (they aren't supervising the homebrewers), thus they don't want their own liability coverage to have to respond (and potentially drive up their rate if a claim/lawsuit is filed). Unless the homebrew club has a general liability policy in effect, the club will be unable to provide a certificate, thus the club's invitation by the host will likely be withdrawn.

    I'm no legal expert, but the club's general liability policy might also protect a club member who may have been the cause of the accident from being personally sued, although nowadays, it seems like personal injury attorneys are naming (suing) everyone who is remotely at fault in the lawsuit.
     
  18. DrewBeechum

    DrewBeechum Meyvn (1,316) Mar 15, 2003 California
    Society

    mugs1789 and PapaGoose03 like this.
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