A crucial insurance must-do for fine wine, champagne, whisky and spirits storage

In a report in late 2023, Euromonitor International forecasted that retail sales of fine wines, champagne, and spirits would rise at a CAGR (current value compound annual growth rate) of 7% over 2023-2028 to reach £4.1 billion.

Investment in fine wines, champagne, whisky, and other spirits is steadily rising, which is good news for those producing, shipping, and storing such luxury stock.

 

Protecting your valuable investment

Given the value of these products, getting insurance in place for the stock's storage is a must and a key priority for many in the trade. This is essential to protect the investment in case of breakages, thefts, flooding, or fire so the collection maintains its value.

Getting the right insurance and cover in place largely depends on the stock's valuation. Underestimate the value, and you won’t have enough in the policy to cover you when things go wrong.

 

Why your insurance can rapidly fall short

In this sector, there are unique reasons why stock valuations are a) essential and b) need to be done regularly.

By their very nature, the values of fine wines, champagne, whisky, and spirits in storage are continually changing. Age, rarity, and investor/consumer interest can all push up the price of a specific brand and vintage. Investors or wholesalers are also likely to regularly add to or withdraw from their collections.

While most expect to conduct a valuation at the start of an insurance policy, fewer review the valuation year on year to ensure that the premium still accurately reflects their stock's value.

 

Bonded warehouse stock

There's also another reason why those using bonded warehouses for storage should regularly review the value their insurance covers. If something goes wrong, and the stock is likely withdrawn from storage, the owner is liable to pay the stocks' duty to HMRC.

Insurers will cover the duty payment, but only to the amount the stock has valued in the policy. If the stock has increased in value, then the owner will need to make up the duty shortfall.

 

Set up a valuation schedule

So, an important and regular 'must-do' for those in the Fine Wines, Champagne, Whisky, and Spirits market is to conduct regular valuations of your stock. The ideal regularity very much depends on the nature and volume of stock you have. If you're increasing stock (say, in the run-up to Christmas or as the latest vintage becomes available), make sure your insurance policy covers you for the total amount.

Fortunately, there are many reputable valuation companies in the market. Be sure to notify your insurance broker/ insurer of any change to your stock’s value so they can ensure you’re fully protected.

 

Can we help?

The Fidentia Insurance Team has a long history of sourcing the right insurance provision for private collectors and those in the Fine Wines, Champagne, Whisky and Spirits trade. If you would appreciate specialist guidance, do get in touch for a chat on tel: +44 20 3150 0080