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How Breweries can Mitigate the Risk of Machinery Breakdown

24 November 2021

A craft brewery has many moving parts. In order to produce a high-quality product your business relies on a whole range of equipment and machinery for brewing, packaging and refrigeration. A breakdown in any of these critical pieces of equipment can lead to lengthy delays, an inability to fulfil supply obligations, and incur increased costs, affecting profit margins. 

Craft breweries and microbreweries are by definition smaller operations. Therefore, even a small halt or delay in production because of machinery breakdown could have a significant, potentially devastating impact on the business. 

Don’t let machinery breakdown become a bottleneck

There are various steps that breweries can take to manage and mitigate the potential impact of this risk.

  • Regular cleaning procedures – This is a well-known step for many brewers in order to maintain a consistent recipe, and high health and safety standards; however, having in place regular cleaning procedures is also integral to making sure your machinery and equipment is operating productively and efficiently
  • Preventative maintenance – Conducting regular inspections and a diligent maintenance schedule can help identify problems early and prevent small issues escalating. Breweries should also consider non-brewing equipment needed to produce and store beer such as cool rooms
  • Predictive maintenance - This involves combining historical data (such as maintenance records and inspection results) and regular measurement insights (scheduled testing) to ensure corrective measures are implemented before the predicted point of failure. Breweries can choose to utilise both maintenance methods to create optimal machinery conditions
  • Insurance – There may be instances where preventative measures have not mitigated the risk of a machinery failure or breakdown and this is when having appropriate insurance becomes so important. Arranging machinery breakdown cover as part of your brewery insurance can help provide financial cover for cost of replacement or repair. Business interruption insurance can also help cover for the loss of income caused by a temporary halt to production

What is machinery breakdown insurance?

Machinery breakdown insurance typically provides cover for your physical machinery and equipment if they break or are damaged. A suitable insurance policy may help with the cost of repair or replacement of the machinery and any damage to property caused by broken equipment. 

Case study: Brewery equipment breakdown results in pouring money (and beer) down the drain

More equipment can often mean more exposure to breakdowns. In this example, a craft brewery was left with not only the cost of fixing their equipment but also a batch worth thousands of dollars that went down the drain. A solenoid on one of their tanks stopped working and no cooling fluid made it into the beer. Unfortunately, the beer was not salvageable and the brewery was forced to dump the whole impacted batch. In this instance, the business could have been entitled to recuperate the cost of fixing or replacing the affected equipment through their machinery breakdown policy.

To review your brewery insurance requirements, speak to a Marsh broker.

Marsh Advantage Insurance Pty Ltd (ABN 31 081 358 303, AFSL 238369) (“MAI”) arrange this insurance and is not the insurer. The Discretionary Trust Arrangement is issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417964) (“JGS”). JGS is part of the Marsh group of companies. Any advice in relation to the Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226 827) which is a related entity of MAI. The cover provided by the Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions. This website contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances. For full details of the terms, conditions and limitations of the covers and before making any decision about whether to acquire a product, refer to the specific policy wordings and/or Product Disclosure Statements available from Marsh Advantage Insurance on request.