The wine industry can be traced back thousands of years, but it is still relatively new to the United States. Some of the first wine grapes in the country were grown by Thomas Jefferson when he brought vines from France to plant on his Virginia plantation.
While about 20 percent of the world's wine grapes are grown in France, the U.S. wine industry is taking an increasingly larger piece of the worldwide market, with exports of U.S. wine expected to rise more than 10 percent this year. According to the Ag Marketing Resource Center, there are approximately 1,800 commercial wineries operating in the United States today--three times the number 20 years ago.
As a result, insurance coverage for export "is becoming quite popular," says consultant Ed Kempkey, of Kempkey Risk Management Services, "especially for companies that are beginning to develop a market in certain countries they want to stay in."
Underwriters such as the Chubb Group of Insurance Companies offer optional global extension to provide primary insurance for overseas business. In addition, ABD Insurance and Financial Services provides large wineries with property coverage and loss prevention. For a big client such as E. & J. Gallo Winery, this covers the more than 12 million cases of wine the company exports throughout the United States and to 86 foreign countries.
In the United States, California still ranks No. 1 in wine-grape production, growing more than 90 percent. According to the California Association of Winegrape Growers, the number of wineries in the state increased by 24 percent between 1998 and 2002.
Wine is now the state's largest finished agricultural product and third-largest agricultural export. Its retail value accounts for more than $15 billion of the state economy. Plus, an estimated 14.8 million people visit California's wineries each year, more than half of which are located in Napa and Sonoma counties.
The United States, thanks in large part to the Golden State, now ranks fourth in wine production worldwide, behind France, Italy and Spain. This stat can also be attributed to this winegrowing trend branching out throughout the continental United States. Wineries can be found in nearly every state from Washington to Maine. Wineries in New York, Virginia and even Midwest states such as Michigan and Ohio are churning out high-quality wines each year.
And that attracts the wine-tasting crowd, and those who like to drink.
"The wineries all have tasting rooms, but also attend numerous wine festivals throughout the year," says Patricia Hughett, assistant vice president of Acordia Inc.'s Richmond, Va., office, which provides insurance services to 25 percent of the approximately 100 wineries in Virginia.
While Virginia and Maryland are two of just eight states without a "dram shop" law, Washington, D.C., Pennsylvania and North Carolina make liquor liability more of an issue because purveyors of alcohol can be held financially liable in alcohol-related accidents.
Depending on state law, wineries can be considered liable for serving patrons too much, much as bars and restaurants can. While many cases alleging negligence on the part of an establishment don't hold up in court, purveyors of alcohol that have been found guilty have been subjected to steep fines and liquor-license suspensions.
"Liquor liability is paramount," says Hughett, who also provides her clients with coverage for property, general liability, workers' comp and product recalls, in addition to liquor liability.
October 15, 2005
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