A Guide to Insurance Coverage for Bars and Nightclubs

Operating an entertainment venue that serves liquor and meals late into the night comes with unique perks and risks. If you own this type of business, it’s important that you protect yourself with a nightclub insurance policy. It’s a business like any other, so there are general liabilities to consider when assessing your coverage needs. However, dealing with drunk patrons poses additional unique risks for your nightclub. Let’s examine items to include in your insurance policy for maximum financial protection.

Who Needs a Nightclub Insurance Policy?

If you own or run an establishment that sells liquor late into the night, such as a nightclub, you can face financially devastating claims. You should have the proper protection in place if this happens. Similar entertainment venues or joints that can benefit from nightclub insurance include bars, lounges, restaurants, clubs (including private ones), reception venues, and taverns.

What Type of Risks Does Nightclub Insurance Cover?

Most insurers sell nightclub insurance as an add-on to an existing commercial general liability policy. Having this coverage can provide funds to replace or fix equipment that breaks down. It can also cover damages to individuals or property resulting from the actions of your intoxicated patrons. Your club’s security is another area of concern due to issues like the forcible ejection of prospective patrons by bouncers. If one of your customers claims they suffered injury after they were over-served alcohol at your establishment, your nightclub insurance can also save the day.

What Type of Insurance Coverage Do You Need for Your Nightclub?

If you manage or operate a nightclub, it’ll help to include the following insurance policies in your overall protection:

  1. General Liability Insurance

    General liability insurance protects you against various third-party liability claims. It can cover losses/damages linked to the consumption of alcoholic beverages or meals you sell. This coverage often includes:

    • Advertising injury
    • Bodily injury
    • Personal injury
    • Damage to property
    • Product liability
  2. Commercial Property Insurance<

    The risk of property loss or damage due to fire or theft is real for a nightclub or lounge like yours. It makes it prudent to have commercial property insurance, which can pay for property repair, replacement, or reconstruction after a covered event.

  3. Business Interruption Insurance 

    Significant property damage due to a covered event like a fire or storm can force you to halt nightclub operations for a while. Business interruption insurance would pay for lost profits and related costs during that time.

  4. Liquor Liability Insurance

    Liquor liability insurance for nightclubs covers claims related to the alcohol you’re selling. If your state has “dram shop” laws, your nightclub or lounge may be held liable for serving liquor to an intoxicated patron who later injures another person or causes a car accident. Liquor liability claims can also be filed in states without these specific laws.

What Are the Covered Nightclub Insurance Claims?

Covered nightclub insurance claims include:

  • Injuries to an intoxicated patron from trip and fall accidents down the stairs at your club
  • One of your customers is at fault for causing a car accident on their way home due to over-drinking at your establishment,

Cover Your Nightclub with RMS Insurance Brokerage

Without a nightclub insurance policy, a few minutes of chaos at your establishment can deal your business a crushing blow. Speak with our agents at RMS Insurance Brokerage now to protect your club or lounge with the right cover.