Running a bar isn’t cheap, as it involves multiple risks that require various types of insurance. Be aware that a bar can face serious lawsuits and penalties if it serves liquor to individuals who are clearly drunk. Here’s a breakdown of the various types of insurance available for bars and taverns.
What Types of Insurance Coverage Do Bars Need?
The only types of business insurance that are required by law are usually workers’ compensation if the company has at least one employee and commercial auto insurance if the business has its own vehicles.
Here are a few optional insurance coverages that a bar owner should consider:
- General Liability – It covers expenses incurred by visitors to your establishment for bodily harm if they are injured on your property. It may also cover claims related to defamation and infringement. Most businesses typically carry this plan and add endorsements.
- Liquor Liability – You need liquor liability coverage if your business serves alcohol and you want to avoid paying for certain lawsuits out of pocket. It covers areas of liability that a general plan doesn’t. It pays for damages caused by drunk patrons. Note that you may have to pay higher premiums for a business in which liquor sales represent the bulk of the company’s revenue.
- Assault & Battery – This add-on coverage pays for physical damage to a victim caused by a patron at your establishment after too many drinks. In some cases, general liability and liquor liability insurance already provide this coverage.
- Workers’ Compensation – Most businesses of all types must carry this insurance to pay for medical bills or income losses when workers get ill or injured on the job. Companies that try to avoid this insurance can face heavy government fines.
The exact type of insurance your bar needs may be different from your competitors. A bar that stays open late will need much more coverage than one that only operates during the day. Not all bars have company vehicles, so such companies don’t need commercial auto insurance. Think of commercial insurance as part of risk management to protect your company from collapsing over one bad event.
If you own a brewery that brews its own beer, you will need specific coverage for items such as tank implosion. It’s best to talk with an insurance expert who has plenty of experience working with bar insurance coverage to help point out other potential risks. You will also need much more coverage if your bar is also a restaurant and entertainment venue.
How Much Does Bar Insurance Cost?
Since insurance plans tend to be highly customized for bars, costs will vary as well. Essentially, the more risks your business faces, the higher the insurance costs will be. Your history of filing insurance claims as a business owner is another factor that affects cost. Business location plays a significant role in premium pricing since areas with high crime rates have higher odds of getting robbed.
The amount of bar insurance you pay depends partly on the size and complexity of your operation. The more employees, the more risks involved and the more you’ll pay. There are ways to negotiate better deals, though, especially if history shows you haven’t filed many claims and your business is in a safe part of town. Find out from your insurer if you can bundle different types of insurance policies together for a discount.
Bars face many financial and social challenges in the coming years. Securing the proper insurance is a meaningful step toward protecting your professional assets. Contact us at RMS Insurance Brokerage, LLC for more information on the coverage you need for your establishment.