Bar Insurance Michigan Policy Information
Bar Insurance Michigan. If you own or run a bar or other drinking establishment, then you know it's a lucrative business to be in - but also one that has its fair share of liabilities with which to contend.
The liquor regulations and laws in various states make it extremely difficult for bars to become chain operations, which means that the bar industry is mainly made up of new and established small businesses.
Bars serve alcoholic beverages by the bottle, glass or pitcher which are consumed on the premises. They are generally open late into the night. Many offer incidental food items, such as snacks or sandwiches, but the predominant operation is the sale of alcoholic beverages. The bar may feature contests, music or other live entertainment, or promotions such as "happy hour" with discounts available during non-peak hours. A cover charge or minimum drink purchase requirement may be imposed at peak times. Some bars have small dance floors.
This makes it even more important to protect the bar's assets from liability claims with bar insurance Michigan.
Bar insurance Michigan protects your establishment from lawsuits with rates as low as $97/mo. Get a fast quote and your certificate of insurance now.
Protecting the Bar and Its Employees
As the owner of a small bar-related business or even a large nightclub, buying and maintaining the proper level of bar insurance Michigan coverage is paramount to your success and protects both you and your employees as well as your patrons. Because you serve alcohol, and alcohol leads to erratic behavior, it's crucial to keep your insurance level at an appropriate amount so that you can mitigate any damage or claims of liability.
Some of the best policy types to consider for your bar includes coverage for your employees. Consider:
- Unemployment insurance. This coverage is usually required by law. It is included as a component of your MI state taxes. When you set up your bar or club with the Department of Labor and Industry your UI taxes will be owed.
- Disability insurance. This type of coverage is optional in MI.
- Medical payment protection. Most bars hire a staff of fewer than 50 individuals, thus not triggering state and federal laws to provide medical coverage. If more than 50 people work for you, then you must provide coverage. Either way, medical insurance is a good perk for employees.
Cover Your Bar or Tavern from Liability Risks
Potential lawsuits can put a real damper on the success of your bar business. When someone files a liability claim against your company, even if it is not a suit merited by the court, it can leave you responsible for a ton of legal costs that eat into your business' bottom line. Bar insurance Michigan can protect you from financial damage if a claim is decided against you and also pay for legal fees and associated court costs.
Some types of bar insurance Michigan liability protection include:
- General liability coverage. This coverage pays claims for covered bodily injuries or damage to property in or outside your bar, such as in the parking lot or dumpster area. Consider a separate rider policy if the bar offers any additional hazards to patrons, such as a mechanically operated bull. Be aware that some policies exclude coverage for intoxicated patrons. For that, liquor liability coverage is important.
- Liquor liability insurance. This insurance kicks in if there is damage resulting from the consumption of liquor or other alcohol at your bar. When some drinks to excess and then causes damage or harm, this protection can be invaluable.
- Assault-and-battery coverage. If your bar is home to a brawl, then you might be held liable, since it can be argued that you failed to keep patrons safe. This insurance coverage covers bodily and property damage resulting from physical altercations.
- Valet insurance. If you offer valet service, then this coverage pays for damage to cars in your business' care.
Protection for Your Bar's Assets and Property
Beyond the bar insurance Michigan coverage types discussed above, your bar may also need:
- Building coverage. If you own the building in which you do business, when this bar insurance Michigan coverage pays claims resulting from perils such as falling objects, severe weather, fire, theft, and vandalism.
- Content policy. Secure your bar's furnishings and equipment such as speaker systems, computers, and pool tables with this type of policy.
- Equipment breakdown policies. If a mechanical failure or power surge causes failure of equipment, then this coverage helps you pay for repair fees and associated lost income.
- Lost income policies. If you need to close the bar due to a covered peril, lost income coverage provides income continuation for a closed period of time to keep your business afloat.
- Flood insurance. If your bar is located in a flood zone, you may need additional coverage for flood damage and loss occurring due to high water. This coverage provides those benefits.
Michigan Nightclub's & Bar's Risks & Exposures
Premises liability exposures are high due to public access to the premises and the serving of alcoholic beverages, which can impair motor abilities and increase the likelihood of trips, slips, or falls. Spilled drinks should be cleaned up promptly. Floor coverings must be in good condition with no frayed or worn spots on carpet and no cracks or holes in flooring. Dance floors must be clean, smooth, and free of debris.
Because lighting is normally subdued, any change of elevation must be carefully marked. All fire exits should be plainly visible from any part of the premises and kept unlocked from the inside during business hours. Backup lighting should be automatically activated in the event of a power outage. Chairs, particularly bar stools, should be regularly checked for cracks and fatigue. Guests must not be permitted to climb on top of chairs, stools, bars, or tables. Parking lots and sidewalks need to be in good repair, with snow and ice removed, and generally level and free of exposure to slip and falls.
Outdoor security and lighting must be consistent with the area. Customers may carry weapons onto the premises. Employees should be trained in dealing with unruly or impaired customers to prevent violence. Personal injury exposures include assault and battery, discrimination, and wrongful ejection due to bouncers escorting a patron out of the premises. Any bouncer activity should be documented and witnessed in case of future lawsuits.
Liquor liability exposure can be very high in states that hold bars liable for injuries resulting from alcohol consumption. The type and amount of alcohol served, and the type of clientele directly impact this exposure. Failure to comply with state and federal regulations can result in the loss of a liquor permit which will close the business.
There must be a set procedure to check ages of all who enter the establishment. All employees who serve liquor must be trained in recognizing signs of intoxication. A procedure should be in place to deny service to underage or intoxicated patrons. Programs that encourage designated drivers or offer free taxi service can be useful.
Property exposures are from electrical wiring, refrigeration units, cooking equipment, and heating and air conditioning systems. All wiring should be current, up to code, and well maintained. Cooking will likely be limited to microwave and toaster ovens. If there are grills and deep fat fryers, these must have automatic fire extinguishing protection, hoods, and filters.
The kitchen must be kept clean and grease free to prevent fire spread. Filters should be changed frequently. Alcoholic beverages are susceptible to damage from heat and smoke. A small fire can become a total loss if the FDA condemns stock due to potential contamination. Where legally permitted, most bars continue to permit customer and employee smoking.
The proper disposal of cigarette butts as part of the closing procedure is vital to prevent fire from smoldering ashes or butts. Theft is a major concern in bars and taverns due to the attractive nature of alcoholic beverages. Liquor should be stored in areas inaccessible to customers. If food is served, spoilage can result from power outages.
Business income with extended time period coverage should be purchased. While clientele tends to be fairly loyal, they may switch to other bars after a major loss due to the lag time between the re-opening and the return to full operations.
Equipment breakdown exposures can be high if operations are dependent on refrigeration equipment.
Workers compensation exposures come from slips, falls, cuts, puncture wounds, burns, foreign objects in the eye, hearing impairment from noise, heavy and awkward lifting, and interactions with rowdy customers. Bouncers should be well trained in dealing with intoxicated or belligerent patrons. Food and beverage handling can result in passing bacteria or viruses, resulting in illness.
While smoking is prohibited in bars in many states, others still permit this. In those states, workers can incur occupational disease from the ongoing inhalation of secondhand smoke. As with all retail businesses, hold-ups are possible, so employees should be trained to respond in a prescribed manner. Cleaning workers can develop respiratory ailments or contact dermatitis from working with chemicals.
The employees in many bars tend to be minimum wage and turnover may be high. Company incentives to encourage long-term employment are positive signs of management control.
Crime exposures are from employee dishonesty and money and securities due to the considerable amounts of cash, alcohol, and tobacco products on the premises. Criminal background checks should be conducted on any employee handling money. Lottery ticket sales or other gambling devices present a major temptation to employees.
Because bars tend to have significant cash sales, cash drawers should be regularly stripped and moved to a safe away from the front of the store. Irregular drops during busy evenings are helpful in preventing a large buildup of cash. Closing time is the most vulnerable time so security procedures should be in place to prevent hold-ups. There must be a separation of duties between employees handling deposits and disbursements and reconciling bank statements.
Inland marine exposures include computers for tracking inventories and valuable papers and records for employee and supplier information.
Commercial auto exposure is generally limited to hired and non-owned from employees using their vehicles to run errands.
The Cost of Bar Insurance
The type of business you own, the number of people who work for you, and the products you serve in the bar all factor into how much you pay for bar insurance. The location of your bar, your personal claims history, and other important factors also play a part. Work with your licensed commercial agent to find a mix of quotes from insurance companies. This can make it easy to spot the right policy for your specific needs.
Michigan Economic Data And Business Insurance Requirements
Business owners who are interested in establishing operations Michigan must have a thorough understanding of the state's economy. They should also familiarize themselves with any regulations and limits that state may have in place for commercial insurance.
Any entrepreneur who is thinking about starting a business in the Great Lake State first needs to determine if it's a feasible location for business operations. As such, it's important to have a keen understanding of pertinent details regarding the economy of Michigan, in addition to the types of insurance coverage that are mandatory for corporations that operate within the state.
Economic Trends for Businesses In Michigan
After a long period of stagnant job growth in the early part of the 21st century, MI has been experiencing a steady increase in employment gains. Between 2009 and 2018, the state has enjoyed a period of uninterrupted job growth; the longest stretch of job growth since World War II. According to economists at the University of Michigan. While there has been a slight decline in the rate of job growth, job creation continues and forecasters say will continue for the next two years, into 2021.
In 2018, an estimated 55,200 jobs were created; in 2019, it's expected that 35,800 jobs will be created, and in 2020, economists believe that there will be a total of 39,300 jobs created in Michigan. While that rate of growth is 1.9 percent slower than the job growth rate between 2011 and 2016, it is still a steady increase overall. In total, approximate 683,200 jobs will be created in MI between 2099 and 2020; almost four out of the five jobs that were lost during the early part of the 21st century will be recovered.
While the unemployment rate has steadily improved, it is still above the national average. In March of 2019, the national unemployment rate was 3.8 percent, while in the state of Michigan, it was 4.0 percent. Mid-Michigan has experienced the largest growth rate in the state, and according to forecasters, it looks like that trend will continue, moving forward. Industries that are expected to see the most growth include:
- Energy, due largely to research and development in clean energy
- Food and agriculture
- Transportation and mobility
- Healthcare industry
- Information and technology
In the state of MI, business owners are not legally required to carry liability insurance; but most entrepreneurs opt to invest in a General Liability or Business Owner's Policy (BOP). A commercial auto insurance policy is also required for any businesses that use motor vehicles to conduct any aspect of their business operations. Workers' compensation insurance is also required for any businesses with non-owner employees. While the following forms of coverage are not required, depending on the type of business you operate, they are recommended:
- Data breach insurance
- Business income insurance
- Commercial Umbrella insurance
Additional Resources For Food Service Insurance
Learn about restaurants, bars, liquor stores commercial insurance coverages. See how small business food service insurance help protect against accidents, oversights and lawsuits resulting from business operations.
- Bagel Shop
- Beer Distributor
- Coffee Shop
- Concession Stand
- Farmers Market
- Grocery Store
- Ice Cream Shop
- Internet Cafe
- Liquor Liability
- Liquor Store
- Sandwich Shops
Bars, taverns, restaurants, cafeterias, and other eating and drinking places have significant insurance needs in three separate areas.
The first is property protection for physical damage to equipment, furnishings, building and supplies due to fire and other perils.
The second is premises liability coverage to protect customers due to slips, trips and falls on the premises, as well as for consumption of food products.
The final need is protection for employees due to frequent cuts, burns and other common employee injuries. Establishments that sell or serve liquor or other alcoholic beverages also need liquor liability coverage.
Slips and falls, along with customer illness due to being served tainted food or drink, are the primary liability exposures. The commercial general liability (CGL) is used to provide coverage for these exposures.
It is important to note that liquor liability coverage is excluded under the CGL form if a risk is in the business of serving alcoholic beverages. Many establishments in this category should therefore consider purchasing a separate liquor liability coverage form.
Restaurant kitchen equipment, inventory and dining room fixtures are common exposures for most eating and drinking places. Many of these establishments do not own the buildings they occupy but have long-term leases and have invested money in various improvements and betterments, including cooking equipment, dining room decorations and permanent fixtures.
There are major differences in the food service business and the very different exposures they present. There are many specific types of restaurants to cater to individual needs and tastes. There a several main commercial insurance classifications for food service.
Concessionaires: The most basic "eat on the run" type of restaurant is not classified as a restaurant at all but is referred to as a concessionaire. Class Code 11168: Concessionaires applies and the accompanying note states that all food and beverages must be sold through hawking or peddling. There can be no location to which customers walk up and purchase the food. This classification includes food sold at sporting events, exhibitions, and parks.
Caterers: Are very similar to restaurants with significant differences. The caterer prepares the meals at its own kitchen or commissary and then transports it to the locations where it will be served. Some final preparation may take place at the final location but the majority generally takes place at the caterer's location. The caterer's employees serve the meals and beverages and oversee the consumption of the food.
Restaurants: The way restaurants are categorized and classified uses the percentage of alcoholic beverage sales as the first criteria, followed by other features or operations.
Common to all of these categories is that entertainment-oriented venues such as nightclubs, cabarets, dance halls, discotheques, and comedy clubs must be separately classified and rated. This means that the sales that those entertainment activities generate must be broken out and rated separately from the sale or food and drink.
Minimum recommended small business insurance coverage: Business Personal Property, Business Income and Extra Expense, Spoilage, Equipment Breakdown, Employee Dishonesty, Money and Securities, Computers, Valuable Papers and Records, General Liability, Employee Benefits, Umbrella, Hired and Nonowned Auto & Workers Compensation.
Other commercial insurance policies to consider: Building, Earthquake, Flood, Leasehold Interest, Real Property Legal Liability, Accounts Receivables, Bailees Customers, Fine Arts, Cyber Liability, Employment-related Practices, Environmental Impairment, Liquor Liability, Business Automobile Liability and Physical Damage, Garagekeepers and Stop Gap Liability.
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Also find Michigan insurance agents & brokers and learn about Michigan small business insurance requirements for general liability, business property, commercial auto & workers compensation including MI business insurance costs. Call us (313) 344-7177.