You've been running your brewery or winery solo, wearing every hat from brewmaster to bookkeeper. But now you're ready to hire your first employee. Congratulations! That's a huge milestone. But here's something that might surprise you: the moment you bring on that first team member, your insurance needs change dramatically. We're talking about mandatory coverage that kicks in whether you're hiring a part-time taproom server or a full-time production assistant.
The good news? Understanding your insurance requirements isn't as complicated as perfecting your flagship IPA or balancing the tannins in your Cabernet. Let's walk through exactly what coverage you need, why you need it, and how to get it right from day one.
Workers' Compensation: The Big One You Can't Skip
In almost every state, workers' compensation insurance becomes mandatory the second you hire your first employee. And we mean that literally—whether it's a full-timer, part-timer, seasonal harvest worker, or your cousin who helps out on weekends. If they're on your payroll, you need workers' comp.
The only outlier is Texas, where workers' comp is technically optional for private employers. But don't get too excited about that exception—going without coverage in Texas opens you up to lawsuits if an employee gets injured, which can be far more expensive than the insurance premium.
Workers' comp covers medical expenses and lost wages when an employee gets hurt on the job. In a brewery or winery, the risks are real: slips on wet floors, burns from cleaning chemicals, repetitive strain injuries from bottling operations, forklift accidents in the warehouse, or cuts from broken glass. The coverage protects both your employee (who gets their medical bills paid without having to sue you) and your business (which avoids potentially devastating lawsuits).
If you're in California, Maine, or Washington D.C., you need coverage as soon as you have one employee. North Carolina requires it with three employees. Other states have varying thresholds, typically between one and five employees. Four states—North Dakota, Ohio, Washington, and Wyoming—operate monopolistic state funds, meaning you have to buy your coverage through a state-run program rather than a private insurer.
Getting Your Classification Code Right
Here's where things get technical, but it matters for your wallet. Workers' comp premiums are calculated based on classification codes—three or four-digit numbers that describe the type of work your employees do. These codes help insurers assess risk and set rates. Get the code wrong, and you could overpay for coverage or, worse, have a claim denied because your employee's actual job didn't match your policy classification.
For breweries, the standard classification code is 2121 (Breweries). This applies when 50% or more of the beer you brew on-site is sold for off-site consumption. If you're running a brewpub where most beer is consumed on-premises, you might fall under a restaurant or tavern classification instead. Wineries typically use code 2143 (Winery and Drivers). The distinction matters because different codes carry different risk levels and premium rates.
Your insurer will base your premium on your total payroll, broken down by classification code. If you have a production brewer (code 2121), a taproom manager (possibly a different hospitality code), and a delivery driver (yet another code), each role gets classified separately. That's why accurate payroll reporting is crucial—audits happen, and misclassification can result in retroactive premium adjustments.
Employment Practices Liability Insurance: Protection Before Day One
Here's something most new employers don't realize: your risk of an employment lawsuit starts before you even hire someone. The moment you interview a candidate and don't hire them, they could claim age discrimination, gender bias, or another protected-class violation. That's where Employment Practices Liability Insurance (EPLI) comes in.
EPLI covers allegations of wrongful termination, discrimination, sexual harassment, retaliation, and failure to promote. The EEOC received more than 88,000 workplace discrimination charges in 2024, with retaliation being the most common complaint at 56% of all charges. Small businesses with fewer than 100 employees are more than twice as likely as larger companies to face employment claims, and one in five companies deals with an employment lawsuit every year.
Why are small businesses so vulnerable? Simple: you probably don't have an HR department, a detailed employee handbook, or legal counsel on retainer. You're winging it based on common sense and what feels fair. Unfortunately, employment law is complex and constantly evolving. Even if a claim against you is baseless, the legal costs to defend yourself can run tens of thousands of dollars. EPLI covers your legal defense, settlements, and judgments.
For breweries and wineries, there's an added layer of complexity if you hire seasonal workers for harvest season or peak tourism months. Temporary employment arrangements require extra care to ensure your practices are fair, transparent, and legally compliant. EPLI provides a safety net when those employment fluctuations lead to disputes.
Other Coverage Considerations
While workers' comp and EPLI are the big insurance changes when you hire your first employee, don't forget that breweries and wineries face unique coverage requirements even before bringing on staff. Federal law requires liquor liability insurance for any business that manufactures or serves alcohol. This is separate from your general liability policy and covers claims related to serving intoxicated patrons who then cause harm to themselves or others.
Once you have employees, you'll want to review your general liability coverage limits. More people on-site means more potential for accidents—both employee-related (covered by workers' comp) and customer-related (covered by general liability). If your new employee accidentally drops a keg on a customer's foot during a tour, that's a general liability claim, not workers' comp.
The craft beer industry supported over 443,000 jobs in 2025, with employment in the brewing sector reaching 197,112 people in 2024—a 3% increase driven by the growth of taprooms and brewpubs. This shift toward hospitality-focused models means more customer interaction, which translates to higher liability exposure. Your insurance strategy needs to account for that.
How to Get Started
Before you post that job listing or extend an offer to your first employee, take these steps. First, contact your insurance agent or broker and let them know you're hiring. They'll walk you through obtaining workers' comp coverage and can quote EPLI at the same time. Don't wait until after your new hire starts—in most states, you're required to have workers' comp in place before the employee's first day.
Second, get your payroll system set up correctly. You'll need to track hours and wages by employee and by job classification. Many small breweries and wineries use payroll services that integrate with workers' comp reporting, which simplifies audits and ensures accuracy.
Third, create an employee handbook and written hiring policies—even if it's just one employee. This doesn't have to be a 200-page manual, but it should cover your equal employment opportunity statement, at-will employment notice, anti-discrimination policies, and safety procedures. These documents are your first line of defense against EPLI claims. Make sure your employment application doesn't ask for information that could expose you to discrimination allegations, like high school graduation dates (which reveal age).
Finally, understand that insurance costs are part of your employee expense calculation. Workers' comp premiums are typically calculated as a percentage of payroll and vary by classification code and state. EPLI costs depend on your number of employees, turnover rate, and claims history. Budget for these costs when you're determining whether you can afford to hire, because they're non-negotiable.
Hiring your first employee is an exciting step for your brewery or winery. It means you're growing, scaling, and building something bigger than yourself. Just make sure you've got the right insurance protection in place before that first shift starts. Your future self—and your business—will thank you.
