Bar Insurance: Outdoor Drinking and Dining On-Premise and Off

Many restaurants and bars open up outdoor areas for patrons during the spring and summer. Allowing for outdoor drinking and dining can help attract new visitors, but it also increases risks that should be covered by special insurance for bar and nightclub establishments.

What Is Bar Insurance?

Bar insurance, also called tavern insurance, financially protects establishment owners that serve liquor with various coverage options. Bar insurance also includes liability coverage that isn’t available in a standard business insurance plan.

What Does Insurance for Bar and Nightclub Cover After a Patron Leaves the Premises?

Bar liability insurance covers liquor-related issues, such as if someone becomes drunk and starts breaking things or punching people. It also pays for other types of damage, such as when a drunk patron gets in a car crash and injures others.

Owners of alcohol-serving establishments should know if their policy covers off-premise incidents that lead to claims. Special coverage may be needed for certain alcohol-related services, such as delivering drinks to a residence. Check if the policy excludes Designed Outdoor Refreshment Areas (DORAs).

Understanding Dram Shop Laws

Dram shop laws go back over a century and refer to laws in which a bar can be held responsible for serving liquor to a person who causes harm to others. These laws that pertain to the sale of alcohol provide victims with a way to recover from losses. Therefore, nightclub owners should understand how their insurance policy defines “your premises.”

Why Do I Need Liquor Liability or Bar Insurance for Off-Premises Incidents?

Various businesses that handle alcohol sales can protect against off-premises incidents by getting a business insurance policy with customized coverage. The types of businesses besides restaurants and bars that need this coverage include caterers, wineries, breweries, and distilleries, as well as delivery services.

Part of customizing a policy for your establishment’s needs involves choosing coverage limits. Bars with higher risks, such as those located in high-crime zip codes, usually need to set higher limits.

How Much Does Bar Insurance Coverage Usually Cost?

The amount of insurance coverage you decide should mirror the amount of your exposure to loss. You can control insurance costs in other ways, such as lowering risks and adjusting your deductible. If you prefer paying less each month on your premium, you can raise your deductible, which is the amount you pay when you file a claim.

Since every bar has its own nuances, it’s best for places that serve alcoholic beverages to customize their business insurance coverage. Do you need hospitality insurance for the bar and nightclub areas of your hotel or motel? Contact our team at RMS Insurance for more information on how to protect your assets. We are ready to assist you in securing the coverage you need.