Welcome to today's webinar titled Wine Collection Risk Overview, Don't Make Poor Decisions. Please be aware of the IMUA statement. I'm Lillian Colson, and I'm pleased to introduce today's presenter, Tina Rutland, President and CEO of EIMC. EIMC is a specialized marine consulting firm offering a full range of services from risk management through claim surveying and adjusting to subrogation across all marine lines, and the firm is expanding, having recently opened an office in London earlier this year. Tina grew up in the marine surveying business, first as a child playing on her father's Captain Hans Rutland's ship, and then working part-time alongside him when he got into the marine surveying business after he came shoreside. After Tina graduated from Georgetown University, where she studied Russian language and history and minored in fine arts, she began working full-time at EIMC while she earned a master's of arts degree in art history and a certificate in museum studies from NYU. Prior to becoming the President and CEO of EIMC in 2007, Tina held a variety of positions at the firm, including marine claims adjuster, in which she handled a variety of marine insurance claims with a strong background in fine arts, wine, commodities, perishables, and other foodstuff. Last year, Tina received the SMART CEO Brava Award, recognizing top female CEOs. She has also presented a broad array of topics for both American Institute of Marine Underwriters and IMUA, ranging from lessons learned from Superstorm Sandy to transportation of perishables to assessing the risk of high-value pharmaceuticals and more. She is an active member of IMUA's Arts and Records Committee, and we are delighted to have her as a presenter today. Tina, the floor is all yours. Tina, I think you might have to unmute your button. Now I hear you. I wasn't hearing you. Hello. Hi. Is it working now? Yes, here. Perfect. All right. So I didn't hear all the wonderful things you maybe said about me. So good afternoon. And I see we have a pretty large number of participants, which is awesome. And I thank you all for taking time to be with us. I also wanted to thank IMUA and AIMU for allowing me to speak about one of my favorite topics, wine. So this is our outline for today. And these are the learning objectives. So I'm hoping to leave you. Well, first, let me say that I am limiting the talk to bottled still wine. Wine is a huge subject, and we could be here for days. I will try to speak a little bit to the difference between commercial wine and rare collectible wine. And at the end of my talk, I hope you'll have gotten some insight into how wine is usually packaged, stored, and transported, what the typical risk factors are, what happens when there is a claim, and then finally, to leave you with some thoughts about lessons to take away for best practices. So what is wine? At its most basic, wine is made by crushing grapes and allowing the naturally present yeast to convert the sugar into alcohol. And here we have a basic flow chart. You see some lovely vines with grapes on them. The grapes are harvested. They're transported to a seeder and crusher, stemmer and crusher. The pressed grapes and juice then transferred to fermentation tanks. And these can be stainless steel. They can be cement. They can be wooden vats or even made of fiberglass. Once fermentation is complete, that is when all sugar is converted to alcohol, the must is transferred usually to barrels for aging. And then before bottling, the wine goes through a clarification and filtering process. It is then bottled. The bottles are sealed and labeled. Sometimes there is additional aging that occurs after bottling. And then eventually, it's packaged and shipped off to be sold and enjoyed. Wine is also big business. In fact, the US is the single largest wine market in the world, both in value and volume. We drink a lot of it. In 2017, sales were around $63 billion. And about a third of that is made up of imported wines. And as far as I'm aware, this is only commercial wine shipments and does not include collectible wines that are sold privately or at auction. Another fun fact maybe is that there are 9,654 wineries in the US. And maybe we can stop and take a poll. Here we go. Who knows which country ships the most wine to the US? Okay, people are either Googling or they stopped drinking Australian wine. Not sure. Are you ready to broadcast the results? I don't know if you can see that now. Yes. Yes, they are broadcast now. Wonderful. OK. Thank you. So you are correct. It is Italy. Italy is the number one import. Italian wine is the number one wine import into the US. Italy is also the worldwide largest producer of wine. The US comes in number four in terms of wine production. And actually, if California were its own country, it would still come in number four in worldwide wine production. So let's move on to the actual product packaging. Most wine is packaged in glass bottles, although this past weekend, a friend of mine showed me a plastic bottle of French pool toy rosé. That was a first. The most common bottle size is 750 milliliters. The magnum 1 and 1 half liter bottles are also quite common. The half bottle size is not so much. Closures vary widely these days, and screw caps have become more and more popular. And now they make up about 25% of wine closures. The majority, though, are still sealed with natural cork, about 64%. And the rest, around 11%, are sealed with plastic and other materials. When there is a cork, there is also a capsule made of metal or plastic. And you see the capsule that has been cut away here in the top left picture and some screw cap examples at the bottom. And on some older wines, you might find a wax seal or capsule, which is shown here at the top right. In this case, the wax capsule is damaged. The bottles are normally packed into fiberboard cartons, as seen on the left side, or wooden cases, as seen on the right. And they're usually 6 or 12 bottles per case. So again, you see a 12-bottle case on the left, and a 6-bottle case on the right. Most of the commercial wines are packed and shipped upright. And usually, higher value wines are the ones that are packed lying flat, and also the ones found in wooden cases. The more expensive wines are more likely to be intended to be stored for a longer period, and also will have the natural cork closures. So they need to be horizontal to keep the corks from drying out. And just as much wine is shipped upright, most of it is stored that way. Most warehouses, you'll see a picture of a regular commercial warehouse on the left side there. And most of those warehouses, in my experience, have only some sections that are temperature controlled. Large portions are not temperature controlled, but they maintain a pretty steady temperature. The storage areas are separated from the loaders so that the kind of blasts of heat and cold that can occur when the dock doors are open don't affect the inner storage. I'm not aware that there are any commercial warehouses that involve humidity control. But this is quite different when you have a dedicated storage for collectible and rare wines. You see an example of a locked cage for private collection storage on the right here. And then in the middle, also a picture of a digital hygrothermometer, which monitors temperature and humidity. So ideal temperature is between 55 and 60 degrees Fahrenheit. And ideal humidity is between 65 and 70%. This is, well, they're both commercial storage. So private collections can be a whole nother level of storage. So private collections can be a whole nother ballgame. People in their private homes might have a proper cellar. They might have something like a cellar, more of a pseudo cellar. They might have a wine refrigerator or two. Or they might just keep their collection in their kitchen or a closet, hopefully not a garage. The cartons and cases are usually unitized with stretch wrap. And then they're either placed on pallets or slip sheets. Sometimes wine is also floor loaded into a container or trailer. And although we know that, ideally, temperature control is the safest, this is just not an economic business reality. There is a similar class system, if you will, between high value and lower value wines. Lower value wine is regularly shipped in dry containers. This is purely an economic decision involving high volume, low margin product. High value wines are hopefully shipped in operating reefer containers or trailers. And what I have not really seen so much of is wine being shipped in non-operating reefers. You might think that that's a decent alternative to provide some extra insulation. But again, it's not something that I've seen in my career. But it might also be because there are some really good thermal liner options available these days. There are a number of freight forwarders who specialize in winemaking. There are a number of freight forwarders who specialize in wine and alcoholic beverage shipments. And they've developed their own thermal liners. They're not anything like the padded, unwieldy blankets that we used to see when I started in this business. These are relatively lightweight, thin. You can see a photo of one here. They can be either five-sided with no bottom or six-sided with a bottom, as you can see in this picture. The liners are suspended. They're tied to the D-rings on the top of the trailer. And then the cargo is loaded in. And then they're sealed up, as you can see on the left. And based on my experience, and there's been some research done as well, these liners hold up pretty well for about, I would say, in most cases, up to a 30-day period. Obviously, it depends to some extent on the temperatures they're exposed to. But it's a decent rule of thumb. Five-sided liners, six-sided liners obviously hold up a little better, if you think about it this way. If you had a cooler, you have some cold beer, you take your cooler and you put it upside down over your cold beer versus you put your beer into the cooler and close the top, that would be the difference between having a six-sided protection and having a five-sided protection. Typical risks, first three, well, similar to other cargoes, physical damage is always a risk. Here, you have a container that was dropped. I do find that with wine shipments, because of the usual shape of the packaging and the unitization of the packages, physical damage is relatively rare and tends to occur when there is a bigger incident, such as a container being dropped or a vehicle being involved in an accident. And even then, the damage is usually limited to actually broken bottles, maybe some contamination with glass shards. There might be some stained labels and cartons. So if we take a look at this container from the inside, we see that there is a pretty large indentation. And apparently, when they tried to pick it up again to right it or they managed to put a couple of holes into the roof panel. But when they started unloading the container, and you can see a pallet being moved in the top right there, we found that there really was limited amount of breakage. There's a carton on the bottom left that shows one broken bottle and some staining on the carton. And another carton there in the bottom middle, where you can see evidence that there's a broken bottle inside because there's some staining. At the end of the day, after the transload and the inspection was completed, the entire shipment actually only had three broken bottles that affected four out of 1,260 cases, which was pretty amazing. I'd like to focus a bit more, spend most of our time talking about temperature abuse because that really has been the most common issue that we encounter. So wine can be damaged both by cold and by heat. We'll start with freezing damage. This usually occurs if a shipment is, we've talked about the fact that much wine is shipped in dry containers or dry trucks. And so if the shipment occurs at a time of year or when weather conditions are such that freezing will occur, or this, of course, occurs due to human error when the refrigeration unit is set incorrectly. So these photos are actually from a case that we handled back in 2013, where a shipment of Spanish wines was loaded into a reefer container, crossed the Atlantic, was discharged on the East Coast, was railed across the country, loaded to another ship at Long Beach in California, and shipped on to Honolulu, Hawaii. When the receiver opened the doors, he found broken bottles and wine slush. If you've ever put a bottle of wine in the freezer to cool it down quickly and forgot about it, you will have had this experience as well in much smaller, on a much smaller scale. So what happened here is that at Long Beach, someone brilliantly thought that plus 15 C should actually be plus 15 Fahrenheit. So obviously, the liquid expands as it freezes. And at first, there might just be some seepage out of the top of the bottle. But eventually, it'll push the cork out. And if the freeze is extreme enough, as in this case, the bottles will burst. And you can see broken bottles in the picture on the bottom right. You can see pushed corks in the other two pictures, the frost on the bottle at the top. And you see the capsule completely displaced because underneath, the cork has been pushed up and out. Even if not all the bottles are damaged, there can be, again, the issue of stained labels and cartons and glass shards. But what about the wine itself? Obviously, any wine that is exposed to air will no longer be saleable. Freezing can also have the effect of producing tartrates. These are harmless. They're crystals. They appear in the form of crystals. They formed from naturally present tartaric acid in the wine. They have no taste. And they're generally not considered detrimental in the wine world, though your insureds might try to argue otherwise. But you could point out that, in fact, in some white wines, tartrates are actually considered a sign of quality and referred to as wine diamonds. Generally, cold is less detrimental than heat. If the cold exposure was limited, chances are that the wine can be marketed as intended. And in fact, restaurants often keep their stock at 40 degrees, which is close to refrigerator temperatures, rather than at the recommended 55 degrees. The cold will slow down the aging process. But again, for a commercial wine or a wine that's intended to be consumed relatively quickly, this should not be a huge issue. So the signs of heat damage are somewhat similar to the signs of freezing damage. Because as with cold, the liquid also expands when it's heated. So again, at the initial stages, there might be some seepage. The corks may be pushed up or completely out. Generally, we don't see breakage in case of heat damage. It will just be the corks being pushed up and out and the wine spilling through the top of the bottle. And again, whenever wine spills, you may have stained cartons and labels, even on bottles which otherwise are physically intact. So let's stay with heat damage a bit longer, because it does tend to be more problematic. So what do we do when we are faced with a heat damage claim? Well, of course, we ask whether or not there were temperature recording devices in the shipment. But more often than not, that is not the case, unless it was a reefer container. And sometimes, the receiving warehouse might check the temperature with an infrared thermometer at delivery and then record that. And this, of course, is useful information. But the first step is really careful examination of the bottles. Are there pushed corks? Is there evidence of seepage? Seepage is wine having been pushed up between the bottleneck and the cork. So sometimes, as in this picture, you might see a bit of wine pushed up through some small pinholes in the capsule. You have to be a bit careful to check whether, in fact, that's not a stain from something else from the exterior, but really is seepage. And sometimes, there may be wine residue on the neck of the bottle below the capsule. I've tried to capture that here in the picture at the top on the right, although it might be a bit difficult to see. So another way to check to see if there's been seepage is to try to rotate the capsule. Normally, a capsule would rotate freely. But if there is wine residue underneath, then it will stick and will be difficult to rotate. It's a good idea to remove a couple of capsules from a couple of bottles to get a better look. And here in the picture on the left, you can see the staining of the cork at the sides where wine has seeped up and out. So this goes for corks. Screw caps, obviously, are a different story. Screw caps will not show the same evidence of heat exposure. It would take some fairly extreme heat to cause seepage with a screw cap. In fact, I have not yet seen that, nor have I seen a bottle with a screw cap explode. And I'm not testing it in my oven at home. Again, if appropriate, depending on the situation, we could also open a few bottles. That way, we can get an even closer look at the cork and also the wine itself. If you're comfortable in your knowledge of it, then you could take a look at the wine itself to look at the coloring. Generally, white wines will gain color, both with age and with heating. And red wines will lose color, going from a fairly bright red to more of a brick shade. Also, you might be able to notice, if there was heat exposure, kind of a stewed or a cooked odor or a smell of something like strawberry jam. And generally, white wines will show damage more readily than red wines. Another thing that might happen with exposure Another thing that might happen with exposure to heat is that it may cause secondary fermentation. And that would mean that there would be a fizz in a wine that normally shouldn't have one. So a wine that normally has a fizz would be something like a Vino Verde. But really, a Cabernet should not have a fizz. Unfortunately, as surveyors, we don't get to taste the wine on the job. But if sometimes the insured does taste the wine at time of inspection, if they do that, they really should be asked to describe any flaws or faults that they claim. Anything that they claim is wrong with the wine that they think is related to temperature abuse, ask them to describe it in some detail. Obviously, this is their business. They should be able to do that and not just say generic things such as, it's just not right. We're going to go back to the previous slide for a bit. Because the next question is, this is all great, but often, and this is where it gets most tricky for us, is that there are no visible signs. So now what? There are no pushed corks. There is no seepage. But the insured is still claiming that the wine is bad. It's been heat damaged. So what can we do? We can look at the detailed transit history or the storage history, if we can review those records. What kind of thermal protection was provided, if any? How long was the voyage? Where did it travel? What was the temperature in those areas during the voyage? All this information helps us understand whether or not there is a likelihood of heat exposure. So for example, the container I showed you earlier with the physical damage, to add insult to injury, that same container was actually lost at the discharge port in summer for six weeks as a result of the Petya cyber attack last year. So on top of a four-week voyage, it sat around in summer heat for another six weeks. So even though we only found three broken bottles, there was a concern that there was likely heat damage. On the other hand, if we have a truckload that moves from Northern California to Southern California within a day or a day and a half, and the temperature outside never goes above 70, it's quite unlikely that there's been detrimental heat buildup. Laboratory analysis, it would be great if we could just send wine to a lab and have a definitive answer of whether or not it was heat damaged. But that is not the situation. It is nevertheless a good idea in cases of commercial wine to collect samples. Even better if there are control samples available from the same lot. But again, there are no tests that can identify heat damage with certainty. So there are tests that can indicate whether or not heat is a possibility. But the same conditions that are being tested for can also be caused by other things. So there's a basic chemistry panel, which would include testing for sulfur dioxide or SO2, which tends to decrease during aging and will decrease faster when wine is exposed to heat. Another test is for turbidity, because heat damaged wine will often appear hazy. A color profile could be useful. We talked about how heat and aging changes the color of the wine. And wine labs usually also offer sensory evaluation, which is more subjective. But in my experience, the sensory evaluation offered by the labs hasn't been as useful as that done by experts, just because I find that they tend not to want to commit to an opinion about heat damage. Cost is always a factor. And so that's, of course, part of the evaluation as to whether or not lab analysis makes sense. So lab analysis is not an option for rare and collectible wines. And I have found that in those cases, an expert sommelier is really invaluable. And so we had a case, which I can only touch upon briefly, because I believe it is still in litigation. But we had a case where a shipment was allegedly heat damaged, but there was no physical evidence. There was nothing in the transit history that would indicate that it was exposed to excessive heat. There were, of course, no temperature records. But the claimant was quite insistent. And we were talking about a quarter million dollars worth of wine. So our recommendation to the underwriter was to engage an expert. And the expert flew out and inspected the wine again and also tasted some of the wines. Because luckily now, since 2014, there is a device available on the market called Coravin, which allows someone to draw a sample of wine without compromising the rest of the bottle. So this is basically a surgical needle that is inserted through the capsule and the cork. There is some inert argon gas applied and then some wine extracted. And the rest of the wine in the bottle is never exposed to the air or to oxygen. As the needle is retracted, the cork is resealed. So this is exactly what our expert did to taste some of the wines, although he did not do this to the super high-end wine. And he determined that there was no indication at all of any heat damage, which allowed the insurer to decline the claim with some confidence. He has an excellent resume. And so it seems that, in this case, a $10,000 cost for the expert was well worth it. I've talked a lot, so maybe we can go to the next slide and do another quick poll. So this one's kind of just for fun, I guess. You can all read it. Tell me what RET is. Nobody's going with the name option, huh? OK, so we've got about 20-some responses. Anybody else want to give it a shot? We see responses moving around again. So we'll end it here and broadcast the results. Close. So in fact, BRETT is short for bretonomyces. And it is a surface yeast that can contaminate wine. So I had mentioned faults when talking about an expert. And there are, of course, issues that can occur at the winery during processing or bottling that have absolutely nothing to do with transportation or storage, but which someone may try to claim to be the result of that. So one indication right up front might be when there is only one type of wine or wine from only one vineyard that is reported to have a problem in a consolidated shipment. This is an obvious red flag and should get you wondering whether or not it might be an origin problem. So BRETT is, again, it's a surface yeast. And it can contaminate grapes, the wine, the equipment if there is not proper hygiene being practiced. Fermentation also can occur independent of heat damage if the wine was bottled with residual sugar, for example. Quark contamination is another fairly common potential source of problems. And then sometimes wineries might overfill their bottles. And this can lead to seepage and pushed quarks even without any heat. So when we're dealing with commercial wine that moves through the global supply chain, we can have some reasonable level of confidence that we know what conditions it's been stored and transported under. But when it comes to rare and collectible wines, especially in private collections, this becomes much, much more difficult. So I mean, ideally, if you're insuring a private collection of wine, you'll ask for an inventory and an appraisal. The appraisal should be USPAP compliant and should clearly identify the purpose of the appraisal and the basis for valuation. But the challenges a wine appraiser faces are that they usually have to rely heavily on information provided by the owner. And this is information which may be impossible to verify. So the appraisal will include any number of assumptions, extraordinary assumptions, and limiting conditions, and will also include a disclaimer of authenticity. So the appraiser may or may not make their own inventory. They may have to rely on the one provided by the owner. They can only observe the current storage environment. They have no way of knowing previous conditions that the wines may have been exposed to. Provenance can be really difficult to verify, even with research. Receipts may or may not exist. Appraisers also would not normally open sealed cases. So they can't check whether these actually contain the number of bottles reported or that the bottles are correct. Appraisers also don't check porks. And they don't taste the wine as part of the appraisal. It's not practical. And often, it's not their area of expertise. But now that we have damaged wine, what do we do with it? So I think the most important thing to keep in mind here is that there are usually mitigation options. In large part, any success of mitigation really depends on the willingness of the insured to cooperate. So it might be feasible to clean, repot, or re-pot the wine. It might be feasible to clean the wine It might be feasible to clean, repack, even relabel damaged bottles. But just a note on that, rare and collectible bottles should never be relabeled. I had a case where it was not clear, I think, to the insurer that what they were insuring were, in fact, rare and collectible wines. It was a shipment being sent for auction at Sotheby's. A few bottles broke and stained some of the other labels. The policy apparently had a clause for included coverage for repacking and relabeling. But I had to explain that relabeling would actually make matters worse. Because even though the value of the bottles with the stained labels had depreciated, the wine itself was good. And the bottles with their original labels retained value. On the other side, in the commercial world, again, a discounted sale, maybe even to the restaurant industry, is another option to market wine quickly. And sometimes you can use that avenue to avoid damaged labels appearing in the market, because restaurants can sell by the glass. And then there are salvage buyers who are licensed and can arrange to sell damaged wine outside the insurer's geographic area, including shipping wine overseas. Apparently, there is a good market in China. And as usual, quality and price matter. The next section is kind of a bit of my opinion. So it's a lot of this. But when we come across heat damage being claimed on lower value commercial wine, and there is no visible evidence, and the transit history doesn't indicate anything extraordinary, I really find it difficult to agree that the wine is unfit for sale or consumption. These are wines that are intended to be consumed within a short period of time. And some limited heat exposure is not going to really damage the wine or impact the sale through normal channels. You might even say that it's been aged, and therefore it's a bit better than it was. The same cannot be said for expensive and collectible wines intended for longer-term storage, because heat does accelerate the aging process. And because that process continues even after the wine is brought back to proper temperature, discounts and salvage sales are definitely more appropriate in this space. So aging is good, but spoilage is obviously bad. So what have we learned, if anything? The lessons are kind of consistent with those for other classes of business. I would say for collectible wines, they are comparable to the world of fine art insurance. And overall, first and foremost, it is important to know you're insured. Nobody would want to insure this guy shown on my slide and his wines. This is Rudi Kornjavan. He made a fortune in the early 2000s by buying cheap wine, blending cheap wine, and relabeling the bottles as rare wines, which he then sold at auction. He made millions doing this before he was arrested in 2012. And it's estimated, actually, that there might be as many as 10,000 of his counterfeit bottles still around in private collections and possibly being sold and resold again. I think despite the limitations that appraisers face in valuing private wine collections, proper inventories and appraisals are vital to avoiding major headaches in the event of a claim. And as with other types of products, accumulation exposure is something to be aware of, particularly for storage locations. Some of you might be familiar with the case of WineCare, which was a company that stored about 27,000 cases of expensive and rare wine in its Chelsea cellar, which was completely flooded in super storm Sandy. The losses were in the millions, and the company eventually went bankrupt. But the most challenging conversations with claimants and insurers are always the ones around loss mitigation. Whether or not repacking or relabeling is acceptable, whether the product can be sold with damaged labels. I mean, there we run into brands and labels clauses, and of course, control of damaged goods clauses. Or whether or to what degree heat or cold actually affected the wine, and how that impacts saleability. I believe, therefore, that it would be useful if underwriters and brokers have conversations around this topic, either at the time of writing the risk, or in any event, hopefully, in the future, to have a conversation with the underwriter writing the risk, or in any event, hopefully, before a loss occurs. That way, the expectations of both parties are clearer, and hopefully, losses can be resolved more quickly, and to the greater satisfaction of the parties involved. I know that's a bit of a fantasy, but I figured I would throw it out there. So I think I'm pretty good on time. I'm at the end of my presentation. Before we go on to Q&A, which I'm happy to answer questions now. I'm also happy to be available after the webinar is over to provide more information to anyone that's interested. But let's just quickly review the objectives again. So I hope that I've been able to give you an overview of the most common packing, storage, and transportation practices, introduced you to the most common risk factors for this type of business, given you a little bit of insight into the challenges in damage assessment, and challenges and opportunities on the mitigation side, and some food for thought on best practices. That we can apply. So thank you very much, and I guess we'll move to Q&A. Thank you, Tina. At this time, Tina's happy to take any questions. To ask a question, simply type it into the Q&A pod that we are bringing up right now. And then once you finish typing your question, you'll click the balloon icon next to it, and then we'll receive your question. So we'll wait a few moments for questions to come in. So the question is, in terms of the wine storage business, what are the key differences between the US and Europe, i.e., in terms of the need for third-party storage providers? I would have to say I would say that the US and Europe have a lot in common, in terms of the need for third-party storage providers. And I think that's a good point. So I would have to say I would need to get back to you on that, because I do not know the answer to that offhand. So what we can do is we'll take this question down, and then we can email it to you, Tina. Yes, that would be fine. And then we can get back to you. Next question. OK, there are a bunch more questions. So another question is, at what bottle price do buyer-sellers typically appraise their wine? So again, probably a question for underwriters, but I did take a wine appraisal course earlier this year with the Appraisers Association. And we were doing some market research in the range, starting in the $20 per bottle and up, which is still quite inexpensive. So it might depend both on quantity and not just on price, depending on what you're storing. I mean, if you're storing large quantities of $30, $40, $50 bottles of wine, you probably would want to have that documented and appraised. And there are plenty of resources for appraisers also in that price range to check values. So retail value would be appropriate for commercially available wines. And there are, again, their market value is there. Larry, can you clarify what the question about valuation methods? So there's a comment from Jennifer. As an underwriter, I would expect it might be the overall collection value, not the per bottle value. That would be correct. But the overall collection is obviously made up of bottles and cases. So on the appraisal level, you would go down to that level to create, and the inventory level as well. Then there are questions for wine storage facilities and or appraisers to recommend in Canada. That would be another one that I would need to do a little bit of research on. And there was a question earlier about salvage. But let me just go to the valuation. I didn't see any other. There are different valuations depending on the purpose of the appraisal. So you would use a different valuation method for insurance, different valuation method for IRS purposes. I would say for insurance, I'm pretty sure I would say for insurance, probably replacement value, market value, which would likely be retail value. Excuse me, I'm losing my voice. So there was a question about salvage. Is that ever an option, or is it too difficult? Absolutely, that is an option. We have done successful salvage a number of times for wines that were either there was some physical damage involved with stained labels, or there was some degree of heat exposure, but not enough to completely compromise all of the shipment. Yes, that is a good point, Linda. She confirmed that the appraisers association can be a resource for wine appraisers, and I think that covers Canada as well. So they have members outside of the US as well. And Tom is asking whether we ever had had to involve the Bureau of Alcohol, Tobacco, and Firearms or FDA on commercial losses. I have actually not come across that in the wine world. Are there any other questions? So sometimes on the salvage side, just to note, salvage can be difficult, and disposal can be difficult as well. So beyond salvage, again, it's a weighing of the costs of what's feasible. But some other options might include selling wine for ingredients, manufacturing to the food industry. It's been years since we sold any for making vinegar. Even that, there have been cases, particularly, I remember in California, where it would be quite expensive to dispose of wine just like that, where we even arranged for a salver to pick up the shipment and empty them. I think he did it for vinegar production, and then he recycled all the glass bottles. And that was just to save on disposal costs. There are all different types of possible scenarios and dispositions. Thank you, Tina. We have one last question that we received via email, and it was two parts to it. What is the most frequent cause of loss that you've seen in wine losses, and what's the most severe loss in your experience? The most frequent is definitely heat damage. And the most severe is probably last year's California wildfires. And then, Tina, did you see the last one from Jennifer? I did, but I'm actually not clear about the EQ. Ah, thank you. Earthquake protections, again, that's something that I would need to go back to my reference library. All right. Thank you very much, Tina, for an informative presentation. Thank you. Thank you. All for staying on. Thank you also to our attendees for your participation and for your questions. All attendees will receive an email with a link to an electronic survey. Please take a moment to respond to the survey and provide feedback to IMUA. And once again, we have a copy of the questions, so we'll have some further discussion and email out that information later, at a later point. Thank you. This concludes today's webinar.

Wine Collection Risk Overview

Tina Rutland

EIMC

wine production

storing wine

transporting wine

heat exposure

cold exposure

damage assessment