CBP Risk Management & Mitigation 2

Question 1

A distillery's rickhouse collapses due to structural failure, destroying 500 barrels. Which insurance type is specifically designed to cover this inventory loss?

Accepted Answer

Inland marine insurance

Answer

Inland marine insurance covers stored goods and inventory in transit or at a location, making it appropriate for barrel inventory losses.

Question 2

Which federal agency must a distillery notify when a significant bourbon release — such as an angel's share fire — creates an environmental hazard?

Accepted Answer

EPA (Environmental Protection Agency)

Answer

The EPA must be notified for environmental releases of hazardous substances, including alcohol vapors that ignite and create air or water contamination.

Question 3

A bourbon producer discovers that a batch bottled six months ago contains trace levels of a banned cleaning chemical. The FIRST mitigation step should be:

Accepted Answer

Conduct an internal audit to confirm contamination scope

Answer

Confirming the scope of contamination through an internal audit must precede a recall to ensure the correct lots are identified and the recall is targeted.

Question 4

Which risk does the 'angel's share' — evaporative barrel loss — primarily represent from a business perspective?

Accepted Answer

Inventory shrinkage and financial loss risk

Answer

Angel's share is an unavoidable inventory loss averaging 2–4% per year, representing a direct financial risk that distilleries must account for in pricing and projections.

Question 5

A distillery operating in a flood-prone area should implement which PRIMARY structural risk mitigation for rickhouses?

Accepted Answer

Elevate rickhouse foundations above the 100-year flood plain

Answer

Elevating rickhouse foundations above the 100-year flood plain is the primary structural mitigation to protect barrel inventory from flood damage.

(CBP) Certified Bourbon Professional Practice Test

(CBP) Certified Bourbon Professional Practice Test

CBP Risk Management & Mitigation 2