Starting a brewery or winery in California is exciting—until you hit the wall of insurance requirements. Between ABC licenses, workers' comp mandates, and liability coverage that landlords and vendors demand, it can feel overwhelming. Here's what you actually need to know to stay compliant and protected while you're crafting that perfect IPA or Pinot Noir.
California ABC Licensing and Insurance
First things first: you need a license from the California Department of Alcoholic Beverage Control (ABC) to legally produce and sell alcohol. For breweries, that's typically a Type 01 (Beer Manufacturer) if you're running a larger operation, or a Type 23 (Small Beer Manufacturer) for brewpubs and microbreweries. Wineries usually operate under a Type 02 (Winegrower) license, which has historically been the go-to for California wine producers.
Here's where it gets interesting: California state law doesn't require you to have insurance to get an ABC license. But—and this is a big but—many cities and counties do. Your local jurisdiction might require proof of general liability or liquor liability insurance before they approve your application. Even if the state doesn't care, your city probably does. Call your local planning department before you assume you're in the clear.
Beyond government requirements, your landlord and business partners will almost certainly require insurance. Most commercial leases for tasting rooms or production facilities require at least $1 million in general liability coverage, and many specify that you need liquor liability as well. Distributors, event venues, and vendors often have the same requirements written into their contracts. So while the state might not mandate it, the reality is you're going to need insurance to actually operate.
Workers' Compensation: Non-Negotiable in California
If there's one insurance requirement in California that's absolutely mandatory, it's workers' compensation. California Labor Code Section 3700 requires all employers to provide workers' comp benefits to employees—and unlike some states, California doesn't have an employee threshold. Hire one person, and you need coverage. No exceptions.
For wineries, you'll be classified under workers' comp class code 2143 (Winery and Drivers), which accounts for the specific risks of wine production—barrel handling, forklift operation, vineyard work, and delivery. Breweries typically fall under hospitality service codes related to alcohol production and sales. These classifications matter because they directly affect your premium rates. A brewpub with a tasting room will likely pay different rates than a production-only facility.
California has been cracking down on workers' comp fraud and non-compliance in recent years. Legislation like SB 847 makes it easier for the state to collect from employers who fail to provide coverage, and penalties can be severe—up to $10,000 for a first violation. If you operate without coverage and an employee gets hurt, you're personally liable for all medical costs and lost wages, plus you'll face fines and potential criminal charges. Don't skip this one.
General Liability and Liquor Liability: What You Really Need
General liability insurance covers third-party bodily injury and property damage. Think: a customer slips on a wet floor in your tasting room and breaks their ankle, or you accidentally damage a venue's sound system while setting up for a beer festival. California doesn't require you to carry it by law, but the standard industry expectation is $1 million per occurrence with a $2 million aggregate limit. Many breweries and wineries carry higher limits—up to $5 million or more—especially if they host large events or distribute widely.
Liquor liability is a specialized coverage that protects you if someone you serve alcohol to injures someone else or damages property. Say a customer leaves your tasting room after a few pours, gets in a car accident, and the injured party sues you for overserving. Liquor liability covers your legal defense and any damages. While California doesn't mandate this coverage at the state level, it's essentially required in practice. Most landlords, event venues, and distributors won't work with you without it, and some cities require it for your business license.
The average cost for brewery liability insurance runs about $77 to $109 per month for $1 million in coverage, according to 2025 industry data. Wineries may see slightly different rates depending on production volume, tasting room traffic, and distribution reach. If you're hosting weddings, concerts, or other events, expect to pay more—or add event-specific coverage.
Additional Coverages Worth Considering
Beyond the basics, there are a few other coverages that aren't required but can save your business in a crisis. Commercial property insurance covers your building, equipment, and inventory if there's a fire, theft, or natural disaster. California wildfires are no joke, and if you're in a high-risk area, this coverage is critical.
Equipment breakdown insurance covers the cost of repairing or replacing essential equipment—brewing systems, fermentation tanks, refrigeration units—if they break down. Business interruption insurance kicks in if you have to shut down temporarily due to a covered loss, helping you cover lost income and ongoing expenses while you get back on your feet.
Product recall insurance is another one to consider, especially for breweries and wineries that distribute beyond their tasting room. If there's contamination or a labeling error that requires a recall, this coverage handles the costs of retrieving and destroying affected product, notifying customers, and managing the PR fallout. It's not cheap, but a single recall can cost hundreds of thousands of dollars without it.
How to Get Started
Start by talking to an insurance broker who specializes in breweries and wineries. There are specialized programs for California craft brewers and winemakers that bundle coverage and often offer better rates than cobbling together individual policies. Ask about Business Owner's Policies (BOPs), which combine general liability, property, and business interruption into one package.
Before you meet with a broker, gather your key details: production volume, number of employees, square footage of your facility, whether you have a tasting room, and whether you distribute beyond California. Have copies of your lease and any vendor contracts that specify insurance requirements. This will help your broker tailor coverage to what you actually need.
Finally, don't wait until the last minute. Insurance applications for breweries and wineries can take a few weeks to process, especially if underwriters need additional information about your operations. Get your coverage in place before you sign a lease, hire employees, or start production. It's one less thing to worry about when you're trying to get your business off the ground.
