Whisky Galore

This article recently appeared in the Scotsman 200.

Whisky Galore….

The remake of Whisky Galore is set to put the spirits industry firmly in the spotlight this year but for those with their nose on the malt money, it’s the leap in the value of collectibles malts that’s paying real dividends.

Prices for the top 1000 rarest single malt Scotch releases have risen by more than 175% since 2008 based on auction figures, according to Whisky Highland. Last year Bonhams sold the most expensive bottle of malt ever sold at auction in Scotland – a bottle of Glenfiddich going for £68,500 smashing the £25-£35k estimate. Even at the more conservative end of the market, a rare bottle can fetch many thousands of pounds.

As the valuation of rare whiskies rises, it’s important to consider insuring collections from fire, flood and whisky theft which is a very real threat for private whisky collectors, sellers and producers. Islay distillery Kilchoman had more than 250 bottles of a private single cask bottling worth over £38,000 stolen in March this year. Last year saw thieves steal over £14,000 worth of whisky from Perth and Kinross Distillery Tullibardine and a whisky enthusiast’s prized collection was stolen from his home in Renfrewshire.

Many might assume that a whisky collection will be covered under their general home contents policy. However, most household policies have low single article limits so they will not pay out on any claim for a single item that is worth more than on average £2,000 in value. Even then, the cover might not recognise the insurance needs that a private collection warrants.

It’s imperative that whisky enthusiasts get their collection valued by a specialist and that the stock inventory is kept up to date. This will help establish the amount that the collection needs to be insured for. Depending on the value of any individual bottle, the valuation may be needed in the event of loss or damage to quickly substantiate and evidence the value of those bottles that may be subject to a claim. This should enable a quick, un-quibbled settlement.

To ensure the necessary protection and preservation of a whisky or indeed wine, clocks, stamps or artwork collection, storage is essential. Keep bottles of whisky out of the sunlight and in a cool and dry place, up off the floor. Direct sunlight can result in the whisky lightening in colour and the labels fading. Often people store their whisky in a basement or cellar but these can be prone to flooding so it’s important that the collection is raised from floor level. If the labels come off the bottles (the most important single element of identification of a whisky bottle), the value is diminished.

The correct insurance provision will cover the cost to restore the label, plus any subsequent depreciation in value of the bottle(s) of whisky would be met. One insurer dealt with a claim where wine labels (although the same could apply to whisky) were eaten by snails that had crawled into the cellar. A standard household policy would not have paid out, since technically the product, the wine, wasn’t damaged.

If buying from auction or direct from a distillery, the whisky is automatically insured for up to 60 or 90 days from the point of purchase as long as the insurance broker is notified within that timescale and the appropriate additional premium is charged.

The policy wording is paramount here and there will be exclusions. It’s important that collectors and whisky enthusiasts ensure that specialist cover is employed for their collections. Remember that typically for whisky or wine collections, as soon as a bottle is opened, cover in respect of that bottle ceases so if it’s a rare one, best to keep it off the nose to keep on the money!