Owning and operating your own bar can be extremely profitable if you run it the right way. Unfortunately, it can also be financially devastating if you don’t have enough bar insurance to cover any damage, theft, or medical costs that may arise from your bar business.
To ensure that you’re protected from as many bar-related mishaps as possible, be sure to check off all of these items on your bar insurance policy checklist!
Before you sign on any dotted lines, it’s important to check your state laws. In certain states, insurance agents or brokers must sell bar liability insurance. Other states don’t require insurers to offer bar insurance as a separate policy, so it might be bundled into commercial general liability (CGL) policies in those cases.
With that said, it’s a good idea to have at least some amount of coverage if you own a bar. The most common type of policy to include is liquor liability; even though more than half of all claims are related to bodily injury and premises liability, there’s still an average of $80,000 worth of liquor costs that need to be covered per claim.
Why you need it
Whether you’re in a personal or professional bar, there’s a decent chance that insurance on liquor is not something you give much thought to. After all, your bar isn’t going to catch fire and nobody is going to come in and rob it.
The problem with insurance policies like these is that they are typically worded in such a way that leaves open lots of loopholes. If you happen to be victim of one of these unlikely events, however, don’t be surprised if your claim doesn’t get paid out as promised.
For example, did you know many policies won’t cover damage caused by flooding or storms? Don’t believe us? Read your policy. If it doesn’t explicitly mention coverage for these events, then it’s not covered.
As a result of these kind of loopholes and exclusions, it’s important to have a bar insurance policy checklist that can help you make sure that your policy is truly protecting your business from as many risks as possible.
The following is a list of items to look out for when creating a bar insurance policy checklist:
- Does my liquor liability insurance include theft and vandalism coverage?
If not, I may need additional coverage to protect against those types of losses.
- Does my liquor liability insurance include liquor spoilage coverage?
- Does my liquor liability insurance include glass breakage/spillage coverage?
- Does my liquor liability insurance include flood/storm damage coverage?
What’s included in your policy
The insurance policy that you have will provide details as to what type of coverage is provided, depending on your specific business.
For example, a general liability policy might not cover accidents that occur in your bar (such as slips and falls), but an alcohol liability insurance policy might provide more extensive coverage. Read through your policy to make sure you know exactly what’s covered.
Additionally, ask yourself if your insurance company should be notified if there are any changes made to your bar (like installing pool tables or live music). The last thing you want is a claim denied because you didn’t disclose a new installation!
What isn’t covered
It’s easy to be lulled into a false sense of security when insuring your bar or restaurant because insurance companies know you want and need their coverage.
Your policy probably covers a lot more than you think it does—but there are some things that aren’t covered, like liquor liability (basically, if someone gets drunk at your bar and hurts themselves or another person). Consider purchasing liquor liability coverage as a separate policy.
Additional items you may want to consider adding
Be sure you have enough liquor liability coverage. If an intoxicated guest injures themselves, their guests or your staff, it’s possible that you could be sued by anyone injured as a result of being served at your bar. You might think that’s unlikely, but that sort of thing happens more than you think. You don’t want to risk it!
Policies to avoid
Here’s a list of items you should avoid to ensure that your bar insurance policy is up-to-date. If you’re looking to start up a bar, it’s good to understand that there are different types of liability policies on the market.
Here’s a brief explanation: General Liability Policies cover all potential liabilities in a general scope, meaning they cover any problems associated with your establishment.
These are more common and would apply if one of your customers were injured at your establishment or if someone slipped and fell on an unknown substance in one of your bathrooms. A liquor liability policy is designed to protect you from any issues that may arise due to serving alcohol to patrons.
For example, say one of your customers gets into a car accident after leaving your bar drunk; he/she could potentially sue you for damages incurred during that time period. A liquor liability policy will protect you from such lawsuits by covering those costs up to your coverage limit (which is usually somewhere between $1 million and $2 million).
Employee Dishonesty policies help protect against dishonest employees who steal money or property from you while working at your bar.
Think of bar insurance policy checklists as a guideline that can help you get closer to optimal coverage. They’re a great place to start, but always remember that each business and its needs are unique. If you have any questions about our insurance products, or need more information on what’s covered and what isn’t under specific circumstances, please don’t hesitate to reach out to your licensed agent.
Originally posted 2022-05-16 14:22:22.