Insure Your Grapevines

New policies cover vineyard assets, not just crop damage

by Paul Franson
grapevine insurance
Lenders require wineries and winemaking equipment to be insured, and federal protection is available for the grapes themselves, but until now, valuable vines and vineyard improvements were not normally eligible. Photo: Suisun Valley Grapegrowers Association.

El Dorado Hills, Calif. -- While federal crop insurance has been available for winegrapes, until now, growers couldn’t get coverage for the grapevines that produce the grapes. That has now changed, and an insurance company is offering to insure vines against a wide variety of ills that can befall vines -- though not disease or natural aging. Trellis and irrigation systems also can be covered.

Live Asset Insurance, a division of Marshall & Sterling, covers a wide range of maladies, including freeze, hurricane, fire, weight-of-ice, sleet, snow, lightning, explosion, tornado, hail, smoke, aircraft or vehicle damage, flood (except zones A & V), vandalism, sprinkler leakage, sinkhole, volcanic action, falling objects, water damage (limited), earth movement, riot or civil commotion and theft.

The company focuses on protecting perennial crops -- not just vines but also trees, shrubs and other plants at locations such as parks, orchards, tree farms, golf courses and even zoos. It covers the trees at the San Diego Wild Animal Park, for example, and also covers Christmas tree farms.

David Teed, managing director of Live Asset Insurance, says the company recently targeted winegrapes as well. “Government crop insurance covers grapes and raisins, but not the vines themselves. They had a pilot program in Napa Valley to cover vines, but realized they weren’t allowed to compete with private industry, so they backed off.” He claims that his service is unique.

Teed adds that the insurance companies that protect wineries typically avoid exterior assets or set very low limits on coverage; in fact, the company is now receiving referrals from some of these insurers.

Live Asset Insurance can insure an individual vine up to $250 and can cover lost wine production as well as vine replacement, depending on how the policy is structured. “A vineyard can be out of production for four or five years, and we can compensate for the lost revenue or pay for the present value of the vines.” It will also pay for loss to the scion, even if the rootstock isn’t damaged, as might be caused by a freeze.

The program is quite new, and it’s still being tweaked. Initially, the minimum premium was $5,000 and the deductible was $10,000, which meant a grower could be out of pocket $15,000 or more. Teed says that made the coverage unattractive for smaller growers -- and larger vineyards generally self-insure. Starting Jan.1, he’ll announce a lower minimum premium -- $1,000 -- and lower deductible of $2,500.

The company says that it already covers a couple of vineyards in California. One actually had a fire in the vineyard, but it didn’t reach the former deductible. “Under the new rates, they would have received compensation.”

Another benefit of the insurance is that it could provide additional guarantees to lenders hesitant to lend on property in these challenging times. “We haven’t focused on the lenders since we didn’t want growers to feel we’re shoving this down their throats, but there’s obvious benefit to the lenders,” Teed says.

Live Asset Insurance’s website is liveassetinsurance.com; a case study on the site explains how one grower is using the service. Gerald Stidham of Eagle America Consulting Services is serving as the specialist in vineyard coverage. His telephone number is (530) 677-5431.

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