Whisky Collections: The ins and outs of insuring private owned whisky investments, from Howden Scotland
In October 23, the company formally known as Bruce Stevenson Insurance Brokers rebranded under the Howden Scotland name and became part of the global Howden Group. Although there is a different name above the door, it’s the still the same people with the same unparalleled local knowledge and expertise.
One of the most exciting specialisms that Howden is continuing to develop is whisky, and even more so, private whisky collections.
Alexandra Richards, Howden’s Private Whisky Collections specialist chats us through the industry and what is happening surrounding insurance. Here she tackles some of the misinformation and misunderstanding about what cover you need, when you need it, and how to protect your assets as best you can. As this industry continues to boom, Howden Scotland want to help.
Alexandra, what's going on in the Private Whisky Sector from an insurance standpoint?
Insuring personally owned bottled whisky collections continues to be busy. Despite recent reports that values have reached a bit of a plateau or even fallen slightly, the volume of sales remains strong.
From our experience, collectors, in the main, have insured their unopened collection of whisky within their household insurance policy. However, as their collection grows in size and value, some home insurers cannot insure the collection or provide the cover that the collection warrants.
Clients turn to us for a stand-alone specialist policy that insures the collection either at home, in storage locations, at the office, at another family member’s home or a blend of all these. It is designed to be flexible and straightforward.
The cover is worldwide which means that bottles are covered whilst in transit and there is no excess to pay in the event of a claim. Accidental damage is covered, a common claim, although losses and damage in transit are the most frequent claims.
What about if someone is looking to insure their collection as a business asset?
Arranging insurance for the corporate collector, an entity that is collecting whisky as a business asset whether in cask or bottle, remains active. Corporate collectors see the merit in a stand-alone specialist policy that gives the breadth of cover required in a simple format.
It is important to note that the whisky collection should be a business asset and that it is not being traded to or on behalf of customers. This type of activity, also very busy from an insurance perspective, is classed as commercial and requires a different insurance approach.
What am I covered for when it comes to insuring my cask of whisky?
The trend to invest in cask ownership has exploded and with that has come the need to insure them to protect one’s investment against physical loss or damage. The use of the word ‘physical’ is important. There is no cover for loss through wear or tear or gradual deterioration.
These refer to loss or damage which develops slowly over time. Such damage is usually due to poor maintenance and protection which an insurance policy is not designed to pick up.
You should always ask yourself: how quicky did the damage occur? If a cask was intact one minute and cracked open the next, there is likely to be a valid claim. A ‘fortuitous’ event will have occurred that has caused the physical damage. For example, a warehouse roof collapsing under the weight of snow that has damaged the cask (we are in Scotland – it does happen!). To clarify, loss to the angel’s share is not insurable!
Can a whisky collection be insured if someone is not resident in the UK?
There are an increasing number of non-UK domiciled private clients investing in casks in Scotland and Northern Ireland. In the main, we can offer them an insurance policy if their territory insurance laws allow and the asset, the whisky, is in the UK.
What is important?
For both bottled and cask collections, keeping an inventory of your collection with supporting documentation is key. Whilst not a requirement, do take photographs or videos of your collection and keep the inventory and values updated. You need to evidence your loss to insurers so by being organised you will have a quicker, more palatable claims experience.
For any insurance queries for your private or corporately owned whisky collection please contact Alexandra Richards – [email protected] and +44(0) 7464 545648, or visit here.
This is paid for content on behalf of Howden Insurance, and does not necessarily reflect the views or advice of The Scotsman. As with any investment or financial advice, readers are advised to research widely and do their own due diligence. Investments can go up as well as down.