The continued soaring demand for rare whisky means that collections are increasing in value all the time.
Collectors would benefit from a specialist insurance policy to protect the bottles in the event of unforeseen loss or damage.
This cover can be provided whether the collection is privately or commercially owned or forming part of a wider investment portfolio.
Have you got a question? Learn more about whisky insurance here,
It's a common misconception that a whisky collection will be insured under a general home and contents insurance policy. However, many household insurance policies have low single article limits and will not pay any claim for a single item that is worth more than on average, £2,000 in value.
Even then, the cover might not recognise the insurance needs that a whisky collection warrants. So what should you consider if you're collecting rare and valuable whisky?
Rare whisky cannot easily be replaced following loss or damage on a 'new for old basis'. It may take some months or years to build up a similar collection again searching auction sales, sometimes globally, and purchasing from dealer’s.
So, insurers in the ‘collections’ market (and it is the same for fine art and antiques) offer two basis of settlements when it comes to claims: agreed value or failing that, market value. Once a value has been ascertained, the client can then determine how they wish to insure the item against it. The agreed value approach is flexible and can be adjusted as the client requires. Learn more about valuations here.
In the UK you can buy around £100,000, either as an annual or monthly sum, of cover for approx. £350 per annum, depending on satisfactory risk information. If the collection is housed in a commercial location it could be more than this.
We can offer a no-obligation quote for whisky collection insurance.
The policies that we arrange cover whisky collections on a worldwide basis, for all risks. That way, it gives the client ‘peace of mind’. If they keep their collection at home and wish to take some bottles to be valued, the bottles are insured whilst in transit to and from the place of home and whilst at the valuers. One reassuring aspect is that if you buy whisky at auction and you have a specialist insurance policy, additions to your collection are insured right from the moment you acquire them without having to immediately tell your insurer. You can acquire between 10% and 25% of the overall value of the collection (varies from each insurer) and be immediately protected.
As long as you tell your insurance broker within 60 days of the purchase and the items are then added to the policy and any applicable additional premium paid, the cover would automatically be provided giving you real peace of mind. Unless there is a specific reason as to why you would wish to reduce the level of cover to ‘named perils’ only such as damage from Fire, Lightning, Earthquake and Aircraft only we wouldn’t recommend it, but that flexibility can be there if needed.
Also, it is important to note that whisky collections can be insured as part of your household policy if you have the right sort of household policy – one which is ‘high net worth’. This is often a more cost-effective way of insuring your collection rather than on a standalone basis but that depends on whether your other fixed assets warrant a high net worth policy.
"When I had to make a claim on my whisky bottle collection the settlement process was very clear and the documentation requirements were very straightforward. The communication from Bruce Stevenson was constant through all the steps and the length of time taken from the start to finish exceeded my expectations.
Thank you for a very stress-free experience!"
Mr V Rohatgi
Any inventory or valuation must be kept backed up ‘off-site’ either physically or electronically. This means if you store your collection at home, and your home is sadly burnt down, you can still access the inventory or valuation.
With regards to security, the usual measures are expected to be met such as good quality locks on doors and accessible windows. You are expected to take reasonable steps to prevent accident or injury and protect your property against loss or damage and keep your property in good condition and repair.
Whilst security is important your collection is more likely to be afflicted by accidental damage. Therefore you should store it in a safe place in your home, where there isn’t a lot of ‘people traffic’. It should be stored out of direct sunlight or heat so as not to undergo evaporation (and indeed damage to the contents of the bottle is not covered if the whisky ‘goes off’ because it has been exposed to direct sunlight or heat). Corked bottles should be stored upright which avoids contact between the cork and the spirit.
Providing insurance for individual high-value bottles is no problem as long as there is a valuation or purchase receipt to evidence it.
Losses typically occur when items are moved about and an accident happens such as a bottle being dropped or damaged whilst in transit. Many people store their wine and whisky collection together, often in a basement or cellar. These can be prone to flooding which is why it is important that the collection is raised from floor level. A flooded cellar will detach labels (the most important single element of identification of a whisky bottle) and diminish their value.
However, with the correct insurance provision, the cost to restore the label, plus any subsequent depreciation in the collection’s value would be met. One insurer dealt with a claim where wine labels were eaten by snails that had crawled into the cellar. Since the whisky wasn’t damaged, a standard household insurance policy would not have paid the claim.
There will be exclusions, so a thorough understanding of the policy wording is crucial. Typically for whisky collections, cover for a single bottle ceases as soon as it is opened. Furthermore, loss or damage caused by an inherent defect, wear and tear, gradual deterioration, insects, vermin, rust, corrosion, mildew, fungus, atmospheric or climatic conditions, or the action of light would not be covered. However, if the damage was caused by extremes of temperature directly resulting from mechanical failure or breakdown of climate control units damaged by fire, lightning, a windstorm or an explosion, the cover would indeed apply.
It’s crucial to always ensure that your covers and sums insured are adequate, and this is particularly true for those working in farming and...
We’re delighted to announce that throughout our 2-year partnership with SAMH we have raised a combined total of £35K for the charity.
Partnering with a...
Bruce Stevenson is “actively speaking” to a number of peers about potential acquisitions after reporting stronger full-year numbers.
Our revenue and gross written premium (GWP)...
Almost every business owns intellectual property but breaching the intellectual property rights of another can cost a fortune, even if it’s accidental. Infringement is...