Ask the Collective
The questions independent drinks founders ask most — answered. Distilled from years of community knowledge so the good stuff never disappears in the feed again.
What credit insurance providers and products should beverage businesses use, and what do they typically cost?
Credit insurance is viewed as essential protection against wholesaler failure in the drinks trade. Members have seen it pay out significantly: when Waverley went bust, one member recovered 90% of owed money through their policy (with a 10% excess); when MCW nearly collapsed due to unpaid HMRC duty, credit insurance gave peace of mind across the group. **Providers and brokers:** - Main players are **QBE**, **Atradius**, and **Euler**. Members recommend going through a broker rather than direct; one member mentioned a contact at **Carole Peachey** (via Rankin Cork, sales@rankincork.co.uk), though they note broker contact forms are sometimes the easiest route. - If you use **invoice discounting**, your bank may offer a credit insurance product that can be bolted on. **Costs:** - One member reported securing cover for approximately **0.2% of annual revenue** for the next 12 months, paying out **90% of invoice value** on debtor failure. - Rates are expected to be **higher at the moment** due to economic uncertainty and nervousness about the hospitality sector post-COVID. - Cover is "quite expensive depending on cover levels required." **Practical benefit:** - Having credit insurance also gives you leverage with slow-paying customers: you can tell them "the credit insurer won't give me more credit on your account" to encourage payment or justify withholding stock. **Pooling opportunity:** - Members have explored whether businesses can pool together to achieve better economies of scale on premiums, with at least one member running comparisons between single-business and pooled-risk options. Contact members directly if interested in joining a group quote process.
Which insurance providers currently underwrite distilleries, and what are members experiencing with renewal challenges?
Distillery insurance has become increasingly difficult to secure, with many mainstream insurers withdrawing from the market. Members report that their existing insurers are refusing to renew terms, and brokers are warning of high rejection rates from their panels. Providers currently willing to underwrite distilleries include: - **NFU** — actively underwriting distilleries; members report switching to them despite higher premiums; praised for reliable claims payment and strong service - **Aviva** — still accepting distillery accounts - **Capsule Brokers** — recommended as a smaller, B Corp broker specialising in distillery placement - **The Clear Group** — brokerage confirmed to handle distillery insurance - **Gallaghers** — established broker (members' existing point of contact), though they are experiencing difficulty placing new renewals as their panel has largely withdrawn from distillery underwriting Current market context: Members note that perceived risk in the distillery sector has increased, with expectations of significant premium rises. One member speculated this may be linked to elevated claims activity in 2024. The market is tightening, and brokers are warning clients that even preliminary underwriting referrals may result in refusal. Members recommend contacting specialist brokers early rather than waiting until renewal deadlines.
What are the red flags and common tactics used in carousel fraud and export scams targeting drinks producers?
Export fraud targeting drinks producers has become increasingly common. Members have encountered several recurring scam patterns that share telltale warning signs. **Common scam tactics:** - **Carousel fraud with large bulk orders** — Scammers approach via existing customers or direct outreach offering suspiciously large weekly volumes (e.g. 8 pallets/week of gin and vodka to Germany). These orders have "all the hallmarks" of carousel fraud schemes and should be declined. - **The import licence registration scam** — An importer (members cited Indonesia examples) appears semi-legitimate, quickly accepts commercial terms, then places a large PO (e.g. £40k for a container). They then ask you to register the product for a made-up import licence and introduce a local lawyer charging £500+ to "process" it. Members refer to this as "the old 411 scam." - **Fraudulent credit requests on large orders** — Companies accept high-value POs (e.g. £100k) but then request credit terms. The fraud only becomes apparent when you attempt third-party financing. - **Email and domain spoofing** — Watch for near-identical company names and domains with subtle differences (e.g. "musgrave-group.com" vs the real domain without the hyphen). Generic, well-written emails from unknown companies should be treated with suspicion. **Warning signs to watch for:** - Unable to find any online presence or company information via Google - Suspiciously quick acceptance of commercial terms - Requests for cash upfront or involvement of third-party lawyers for licensing - Offers of unusually large volumes - Email addresses or websites with slight variations from legitimate company names - Enquiries via Facebook from "Guest" accounts **Verification tactics:** Members recommend checking company websites carefully for domain authenticity and running any unfamiliar company names through the community before proceeding. When in doubt, decline and share the company name with others.
Is Directors & Officers insurance recommended and what should a drinks business include in its insurance policy?
Yes, D&O insurance is recommended as part of a comprehensive business insurance policy. Members typically combine D&O with other business coverage on a single policy to improve pricing and simplify management. **Insurance providers and brokers:** - **Aviva** — members use Aviva for combined business policies that include D&O coverage - **A Plan** — a broker used by members with no reported issues; offers intro available on request - **PIB Insurance Brokers** — specialise in getting competitive pricing by combining policies and identifying benefits and risks; contact Brett Wexler (ACII, Tech Iosh, AMinstLM, Chartered Insurance Broker) at T: 02035357905, M: 07904809237, E: Brett.Wexler@pib-insurance.com, W: pib-insurance.com **Key consideration:** Members stress that the true value of a policy only becomes clear if you need to claim. Shopping around via a broker who can bundle policies together typically yields better rates than standalone policies.
How should we assess and manage the credit risk of supplying major distributors, particularly when they have payment issues or we can't obtain credit insurance?
Assessing distributor credit risk requires weighing the business opportunity against the financial exposure, especially when traditional protections aren't available. **Key considerations members raised:** - **Credit insurance** — The first step is attempting to secure credit insurance coverage. If this fails (as with some larger distributors), it signals elevated risk and makes alternative protections essential. - **Cash on Delivery (COD)** — For new orders or problem accounts, COD is a viable option to eliminate payment risk, though may create friction with larger distributors who expect standard terms. - **Payment terms and credit limits** — These are your primary levers. Members noted the tension: refusing to increase terms/limits risks losing the distributor entirely to competitors, but granting them without confidence in repayment creates cash flow risk. **The core dilemma:** Even when a distributor has payment issues, withdrawal of supply may simply mean they stock competitor products instead. This requires balancing the strategic value of shelf space against financial exposure. **Caveats:** Members did not provide a framework for deciding whether specific distributors are "worth the risk"—this appears to be a case-by-case judgment based on the distributor's market importance, the severity of payment delays, and your own cash reserves. No members shared examples of formal financial risk scoring processes.
What insurance coverage beyond public liability should a drinks business have in place?
Members recommend a comprehensive insurance portfolio that goes well beyond basic public liability. The typical coverage includes: - **Employers' Liability** — required if you have staff - **Public Liability** — your baseline cover - **Products' Liability** — essential for any food or drinks manufacturer - **Property/Material Damage** — cover for all physical locations where you operate - **Money** — protection for cash and valuables - **Goods in Transit** — covers stock while being moved between locations - **Business Interruption** — protects against loss of income if operations are disrupted - **Legal Expenses** — covers legal costs if disputes arise - **Cyber Liability** — increasingly important for digital operations and data protection - **Management Liability / D&O** — Directors & Officers cover for leadership exposure Members emphasized this is particularly important if you operate across multiple physical locations, as you'll need to ensure all sites are properly covered.
What insurance providers and brokers do members recommend for alcohol businesses in the UK?
Members have had positive experience with **FSB (Federation of Small Businesses)** services for general business insurance involving alcohol, and specifically recommend an annual subscription to their broker services as worth the investment. While the discussion excerpts don't provide extensive detail on multiple insurance options, FSB is the provider named directly by a member with practical experience in the alcohol sector. Members seeking more comprehensive recommendations may also benefit from discussing their specific needs (production type, location, scale) with brokers familiar with HMRC requirements and bonded warehouse logistics, given the regulatory complexity of alcohol businesses.