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Covering wine—For collectors and vineyard owners Fireman's Fund specialist approach includes personal and commercial products By Phil Zinkewicz In an old Peter Falk “Columbo” episode, actor Donald Pleasence all but chews up the scenery as the snobbish owner of a winery in California. Plot developments have Pleasence kill his half brother in order to save his winery. Naturally, Columbo is assigned to the case and, in a short period of time, must become knowledgeable about fine wines in order to trap Pleasence. In one unforgettable scene, Pleasence is standing on the edge of a cliff, hurling his entire wine collection into the Pacific Ocean after it had been ruined from exposure to excessive heat. Pleasence is not upset because he is tossing his profits away or even because Columbo has arrived to arrest him for murder. He is crestfallen because his precious wine collection, the only thing he ever lived for, is going to be wasted. Many people feel that way, albeit—we hope—not to a murderous extent, about their collections. Whether it is baseball cards, fine art, exotic jewelry, or even shrunken heads, people tend to become passionate about the things they’ve amassed. Ask Chris Heidrick, vice president of personal lines insurance for Fireman’s Fund Insurance Companies. “We are recognized as an industry leader in insurance collectibles and large art collections,” says Heidrick. “Over the years, Fireman’s Fund has insured such diverse high-value collectibles as Abraham Lincoln’s stovepipe hat, Fabergé eggs, a Betsy Ross-made American flag, dinosaur skeletons, antique carousel horses, sports memorabilia, Academy Awards and Emmys and, yes, even those shrunken heads.” Heidrick explains that each type of collectible can be underwritten with an agreed-upon value, establishing a value up front that is not affected by downward changes in the market value. “And to help assure adequate coverage in an escalating market, we pay up to 150% of the agreed value. So, the invested value stays intact, with no deductible,” says Heidrick. Fireman’s Fund also offers “blanket” coverage on large collections, provides a $50,000 per item limit and also allows the customer to tailor higher per-item limits appropriate to their particular collection. “The blanket coverage is especially valued by collectors who regularly buy and sell pieces of art from a total portfolio worth millions of dollars,” says Heidrick. “And if loss befalls a piece of art, Fireman’s Fund adjusters have extensive experience in dealing with restoration experts and avenues for recovery of stolen art.” Continues Heidrick: “Customers frequently have more opportunity to shop or scour galleries when on vacation away from the demands of daily life. When customers purchase new art, jewelry or collectibles, they have automatic coverage of up to 100% of the limit in their policy for objects in the same category, as opposed to the industry norm of 25%. That means there’s coverage while the item or items are being shipped home. This applies worldwide and, for convenience’s sake, we extend this automatic coverage of new purchases for 90 days, giving customers ample time to notify their agent to add them to the policy.” Fireman’s Fund’s policy also addresses policyholders’ emotional attachment to their collections,” says Heidrick. “A Tiffany lamp might have illuminated a mother’s childhood home and [thus] carry special sentimental value. A bracelet might evoke a special memory of youth. In either case, Fireman’s Fund sees the emotional meaning behind the obvious market value and can advise on the care of the treasured object. “If an insured item is lost or stolen, we partner with a combination of private investigative firms and public law enforcement to recover the artwork undamaged,” Heidrick continues. “If recovery is not possible, we will assist in locating a similar replacement item or, in restoration, with compensation for any difference in value due to the damage. When replacement or repair isn’t possible, our top priority is a fast and fair settlement.” But, back to wines. Heidrick says that, in addition to the insurance coverages already mentioned for collectibles overall, Fireman’s Fund also makes risk management and loss control expertise available to wine collectors. “There are specific issues that must be addressed in wine collecting,” he says. For one thing, the wine must be properly stored, with back-up power generators in order to keep the wine at just the right temperature.” Also, there is a good deal more activity with wine collections as opposed to other collectibles, Heidrick explains. “The portfolio is always changing. At times, owners will drink some of their wines, give some away or buy some more. That’s what makes the blanket coverage ideal. Sometimes,” he continues, “geography comes into play. We might advise a wine collector who lives in earthquake-prone California or hurricane-prone Florida to store the wine away from the home. Also, wine collectors need to be specific about wine labels. A scratched or marred label could seriously reduce the value of the wine.” Steve Bones, product director in commercial lines for Fireman’s Fund, addresses wine collections from the commercial standpoint. “Fireman’s Fund has been insuring wineries for more than 50 years,” says Bones, “but, in order to meet the needs of the fast-growing wine industry, we have introduced an end-to-end solution for wineries, with coverages specifically created for the business of growing, making and selling wine. Our Insurance for Wineries product is highly customizable and offers wineries of all productions a policy that covers every aspect of the wine-making and selling process. The policy integrates Fireman’s Fund Farm and Ranch Winery Program together with wine coverages and services from Fireman’s Fund personal and commercial lines.” According to Bones, the “roots to retail” product insures every aspect of the winery business including: viticulture equipment, employees, harvesting, wine making, retail stores, tasting rooms as well as on-site tours and events. Coverage includes property, business income, liability, international operations and key employees. “From vintners with boutique operations to large winery owners, all members of the wine industry will be better protected.” Bones laid out the benefits offered under the program: • Business income—Stabilizing business income by covering unforeseen expenses such as expediting the delivery of available replacement grapes and temporary equipment rental. • Reputation protection—Protecting a winery’s reputation and brand with crisis communications coverage and product withdrawal expense coverage. • Agricultural chemical drift—Coverage for physical injury to people, domestic animals or crops, including injury due to pesticides and herbicides above-ground contact or accidental chemical drift to neighboring properties. • Hospitality coverages—Security for all types of wine tastings, on-site tours, private events and retail operations. • Property-Gard Select® Wine Products Valuation—Coverage and valuation options guarding buildings, business and personal property, wine products and barrel and case storage products against loss. • Key Employee Plan—Key employee replacement to help pay for the cost to move and train replacements for wine makers and vineyard managers. Bones says that the exposures to loss in the winery business are many. “Besides the temperature in the storage area, you have to think of things such as the careful removal of bottles of wine from the rack, the humidity factor, and even the refrigerator being used,” he says. “Wines can be damaged as the result of excessive vibration, so your normal refrigerator is unacceptable because the compressors tend to vibrate. It’s all right for storing milk, but not wine. We’re seeing more incidents of contamination and leakage.” Both Heidrick and Bones say that the independent agent is of extreme importance in distributing their insurance coverages both on the personal and commercial sides. “At Fireman’s Fund, we work with a limited number of agents because we want to work only with the best,” says Heidrick. “In terms of wines and wineries, the agent must be able to understand exactly what the customer has in the portfolio and what coverages are needed.” “In addition,” explains Bones, “the agent should be prepared to assist customers in protecting what they have. Agents must consider the time it would take to rebuild a collection that is damaged or lost. They should be able to advise the customer whether blanket protection is right for the exposures or whether the collector should itemize the exposures.” Finally, say Heidrick and Bones, the agent should direct the client to an insurer with a history of sound underwriting and claims handling. We wonder what kind of coverage Donald Pleasence had. But then, a total loss resulting from a murderous act would probably be excluded from coverage. * |
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