Lloyd’s Of London Hard Stop Leaves Californian Wineries In “Total Crisis”

 Tuesday, August 13, 2019

 Insurance Business

California is the world’s fourth largest wine producer in volume. The regions of Napa and Sonoma are world-famous and are known for producing some of the most highly prized — and priced — wines

While wine lovers around the world are sitting back and enjoying a Sonoma Pinot Noir or Napa Cabernet, the vintners and growers of the region are feeling the squeeze as they try to figure out how to mitigate California’s burgeoning wildfire problem and how to insure their prized wine inventory.

For the better part of the past 20-years, the California wine business has turned to Lloyd’s of London, specifically the London Cargo Market, for its inventory Stock Throughput policies. However, after a tough year in 2017 that saw Lloyd’s suffer a $2.6 billion loss, the historic market initiated a strategic review, which included the axing of unprofitable lines. Unfortunately for vintners and growers in California, this resulted in Lloyd’s taking a hard stance against insuring wine stock halfway through 2019, leaving the US domestic market under great pressure to provide the much-needed coverage.