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Fine wine collections need the right insurance

By LLM Reporters on 4th July 2019

Words by Bernard Hayden, Head of Risk Management at Azur

The renowned Sotheby’s Finest and Rarest Wines collection returned to London in June, attracting some of the UK’s most prestigious collectors, and saw over a thousand lots of wines being auctioned over two days. One of the most attractive lots, two bottles of La Romanee-Conti (considered one of the world’s greatest wines) sold for over £45,000, contributing to a final auction total of over £2.3 million.

Wine auctions have been attracting much attention over the last few years. Just this March, Sotheby’s set a record for the highest-grossing auction ever. The extreme scarcity of many fine wines makes these highly sought-after collectables a great investment, often outperforming more traditional stocks and shares. But the shear fragility and practicalities of owning these assets make them particularly risky and putting the right insurance in place is essential when it comes to protecting the long-term value.

Maintaining optimum conditions is vital if wine collections are going to be protected and their value sustained

Risky business

In the US last year, the average value of a fine wine collection was between $50,000 and $100,000, while the total value of collectable wines and spirits in private hands was estimated to be between $5 and $10 billion. Despite this, less than 10% of those collections were insured, a shocking statistic when you consider the potential loss.

But it’s not just about getting the insurance right. There are other considerations for protecting these prestigious assets. When it comes to storage, vigilance is so important. Maintaining optimum conditions is vital if wine collections are going to be protected and their value sustained. Things like temperature, humidity and even cleaning products stored nearby can impact the quality of a fine wine.

For example, if the cellar is not humid enough corks can dry out and oxygen can get in and affect the taste of the wine. But by the same token, if the environment the bottles are stored in is too humid, labels can be damaged or removed which can be problematic for both identification and re-sale. With factors like this in play, one simple mistake or an unforeseen circumstance like a power cut can take away the value of a wine collection that has been building up for years.

Taking simple steps to protect against these factors, such as fitting an alarm system that can detect fluctuations in temperature and humidity, can not only help with peace of mind, but also when it comes to getting the insurance right.


Many collectors assume their wine collection is adequately covered by their home and contents policies

Getting it right

Many collectors assume their wine collection is adequately covered by their home and contents policies. But, it’s worth being aware that insurers have a threshold for exceptionally valuable items. While this would usually cover small personal wine collections, those with larger ones may find themselves more at risk of a big loss without specialist cover in place.

With most general home insurance policies not covering factors like temperature control problems or power outages, any such damages to prized wine collections would not be covered. Given these risks are some of the most likely to cause damage, it renders many home insurance policies practically void.

The right people to turn to

Taking out a specialist and customised policy for your wine collection, designed to cover your specific needs, is the best way to go to give peace of mind should the worst happen. General risk factors such as fire, theft, floods, and breakages can all be covered. Bottle-by-bottle coverage is also offered, which is particularly useful if a single bottle of wine is significantly more valuable than the rest.

High Net Worth brokers with expert knowledge about your collection can help find the right policy. They can recommend professional appraisers who will advise on how to store collections properly, the safest way to transport them as well as advice on how to buy and sell high-end wines. An insurance broker can also help with inventory management to help a collector keep track of what they own, how it’s stored and the best time to drink a wine.

Insuring rare and valuable wines requires expert knowledge of this ever-growing sector to ensure that the policy fits the exact needs for each collection

Stay protected

Insuring rare and valuable wines requires expert knowledge of this ever-growing sector to ensure that the policy fits the exact needs for each collection. General home insurance policies just don’t offer adequate protection for such rare wines, High Net Worth insurers can tailor specific cover whilst also opening up access to a network of experts who can provide invaluable advice.

As we saw at the Sotheby’s auction, collections of fine wines can change hands often and sometimes quite quickly. Having a specialist advisor who is well immersed in the industry can support the owners. They can help them stay on top of any market changes and developments which could affect the value of a collection and keep inventories fully up to date.

You don’t ever want to find that you are underinsured. Taking out insurance against your investment isn’t something you can do with stocks and shares. Given the tangibility of liquid assets it is possible to cover yourself, but the key is making sure that you get it right and are fully covered if the worst should happen.

Image at the very top of the article credit: Bulgn/Bigstock.com