Hawaii Nightclub Insurance Policy Information
Hawaii Nightclub Insurance. If you own a nightclub, you likely know that it is a lucrative business that can be financially rewarding, but with those rewards comes a high level of risk. Because the investment you've made in your business is significant, it's important that you protect your business with the right type and level of business insurance.
A nightclub is primarily a place of entertainment for acts featuring comedians, magicians, or musicians. They are generally open late into the night. There is normally a cover charge or minimum purchase requirement. Liquor may or may not be served, but non-alcoholic beverages and food are generally available for on-premises consumption. There may be full restaurant service or just appetizers and snacks. There is likely to be a dance floor.
Even if your club is very small, you need Hawaii nightclub insurance coverage to stave off the financial distress that often follows a liability suit. Some policies that you must carry for your nightclub are required by state or federal law, while some other types may be required by the bank that loaned you money to purchase your club or the leasing agent who rents your club's space.
Hawaii nightclub insurance protects your establishment from lawsuits with rates as low as $67/mo. Get a fast quote and your certificate of insurance now.
What Coverage Does Your Nightclub Business Need?
Other coverage types are recommended but not required legally or contractually. Some of the most popular types of Hawaii nightclub insurance to consider include:
- Unemployment coverage. This coverage is mandated by the HI, and is included in your state tax bill. After establishing your business and registering the business with the HI Deptmartment iof Labor and Industry you will pay it with your taxes.
- Nightclub coverage. This specific coverage is tailored to the nightclub genre, and this Hawaii nightclub insurance includes several types of liability insurance to protect your business from claims and the associated legal costs of defending your business in court.
- General liability coverage. Cover bodily injuries to patrons and others as well as property damage in the nightclub or exterior areas with this type of insurance. It may exclude any losses occurred as a result of someone who is inebriated after drinking in your HI nightclub.
- Liquor liability coverage. When a person who has consumed alcohol causes an injury or becomes injured or causes property damage in your club, this insurance kicks in and pays whereas a general liability policy does not.
- Assault and battery liability. Damages stemming from assault or battery are covered by this type of rider to your policy.
- Bouncer liability coverage. If you employee bouncers, then this type of Hawaii nightclub insurance is a must. This covers physical harm to club patrons when bouncers remove them from the club. It can also pay for injuries to the bouncer during the course of performing ejections from the club.
- Garage-keeper liability coverage. If your club offers valet service, then the garage keeper policy pays for damages caused to patrons' cars while in your care.
- Event liability coverage. If you hold an event such as a concert or other outdoor event, then this coverage pays for liabilities that might arise from attendees' participation in the event.
- Worker's comp coverage. HI requires you to keep this type of insurance in force to protect employees from workplace injuries and illnesses. It provides medical and income payments for injured or ill workers. Owners can be exlcuded.
Protecting the Night Club's Assets and Property
Beyond protecting yourself, your patrons, and your employees, Hawaii nightclub insurance to protect your business' assets and property is also important. Some of the most common and popular include:
- Building insurance. If you own the building in which your club does business, this protection provides payment for structural damage due to perils such as vandalism, falling objects, fire, and weather-related events.
- Contents coverage. For property that you store inside your nightclub, this coverage provides a level of protection in the event of fire, weather, and other perils. It might include coverage for computers, music equipment, and sound systems, among other things.
- Equipment breakdown coverage. If a mechanical failure or a power surge causes your nightclub's equipment to break down, this insurance kicks in to help you replace or repair it.
- Lost income insurance. If a forced closure of your business occurs, this Hawaii nightclub insurance provides income for a certain period of time until your business is operational once more.
Hawaii Bar's & Nightclub'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. Customers may become ill from ingesting contaminated food or beverages.
Cleanliness standards must be monitored. 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 should 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. Dance floors should be in good condition with regular maintenance to provide a smooth surface to prevent falls.
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 from bouncers escorting a patron out of the premises.
Any bouncer activity should be documented and witnessed in case of future lawsuits. Contracts with entertainers should be clear as to responsibilities and rights of parties. As most musicians are subcontractors, that relationship should be established by contract including how the musician(s) is to be paid.
Liquor liability exposure can be very high in states that hold nightclubs 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 to customers must be trained in recognizing signs of intoxication. A procedure should be in place to deny serving 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, any cooking equipment, and heating and air conditioning systems. All wiring should be current, up to code, and well maintained. Cooking may 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, nightclubs may permit customer and employee smoking. If there is smoking on premises, 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 due to the attractive nature of liquor and tobacco. 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 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 nose, 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 lounges 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 nightclubs tend to be minimum wage and turnover may be high. Company incentives to encourage long-term employment are positive signs of management control. Entertainers are exposed to various hazards based on the performance type.
If there are entertainers under a long-term contract, a review of their contracts and working conditions may be needed to determine whether they qualify as employees or subcontractors.
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. If there is a substantial amount of cash receipts, cash drawers should be regularly stripped and moved to a safe away from the front.
Irregular bank drops during busy evenings can be helpful in preventing a large buildup of cash. Closing time is the most vulnerable time so security procedures should be in place to prevent holdups. There must be a separation of duties between employees handling deposits and disbursements and reconciling bank statements.
Inland marine exposures include accounts receivable if the nightclub offers credit to customers, bailees customers for entertainers' equipment and customers' coat check, computers for tracking inventories and payrolls, and valuable papers and records for supplier and employee information. There must be checks and balances in place to ensure that any checked goods are released only to their rightful owner.
If entertainer's items are left overnight, the insured is responsible for their security. If the equipment is owned by the nightclub, musical instrument coverage will be needed. There may be a substantial amount of audio-video equipment and other electronic equipment for sound and lighting of the dance floor.
Business auto exposure is generally limited to hired and nonownership auto from employees using their vehicles to run errands. If the nightclub offers valet parking, garagekeepers coverage should be purchased to cover damage to customers' vehicles. MVRs and driving records should be obtained for any employee driving or parking customers' vehicles. If valet parking services are contracted to another firm, the nightclub should be named as additional insured on the contractor's policy.
Affording Nightclub Insurance
The average nightclub insurance policy runs in the thousands per year, but the amount you'll pay depends on a number of factors including the size of your club, the number of patrons you usually serve, how long you've been in business, the total revenue of your club annually, and whether or not you offer live entertainment. Your club's history of claims and your personal credit history may effect the rates.
Work with an commercial agent to find the right level of Hawaii nightclub insurance coverage for your particular needs. An professional agent can help you retrieve quotes from multiple insurers to find a policy catered to your needs that is affordable and that fits well within your business' individual budget.
Hawaii Economic Data, Regulations And Limits On Commercial Insurance
Location is one of the most vital factors that prospective business owners need to take into consideration when they are thinking about establishing an operation. You can have the best possible products and offer the most exceptional services, but if the location doesn't offer a market that can benefit from those goods and services, your business will have difficulty thriving.
As such, if you are an entrepreneur who has set your sights on Hawaii for the headquarters of your business or a new division of an already existing corporation, it's a good idea to familiarize yourself with the state's economic data. It's also important to understand what type of commercial insurance you will need to invest in to protect yourself, your employees, your vendors, and the clients you serve.
Below, we provide a brief overview of important economic data and the commercial insurance requirements for business owners in the Aloha State.
Economic Trends For Business Owners In Hawaii
A state's unemployment rate is a good indicator of the overall economy of the region. It indicates that there are enough jobs available to support the economy, which is a direct reflection of the success of businesses in the state. As of 2019, the Bureau of Labor Statistics indicated that the unemployment rate in Hawaii was 2.6%, 0.8% lower than the national average of 3.4% from the same timeframe. This rate has also decreased throughout 2019, as it was 2.8% in July of 2019.
As with most states, the best locations to start a business in the state of Hawaii include urban areas and the suburban regions that surround them. The top cities for business owners in HI include:
- Pearl City
While several industries do well in Hawaii, certain sectors thrive. Tourism has long been the leading industry in the state, as people from around the globe flock to Hawaii each year.
Agriculture is also a booming industry here; the state is the second largest producer of sugar can in the U.S. Defense is also a key sector here, as all branches off the armed forces have bases located in the state. Another industry that also thrives here is manufacturing; specifically the manufacturing of cotton-based goods, such as clothing.
Commercial Insurance Requirements In Hawaii
The Hawaii Department of Commerce and Consumer Affairs regulates insurance in HI. Hawaii mandates very few forms of insurance coverage by law. They enforce worker's compensation.
Hawaii requires you to have worker's compensation insurance if you hire even one employee on a regular basis. This includes part-time employees, family members, minors, and immigrant employees. It is not required for independent contractors or domestic employees, though you should check to make sure any contractors you have are true contractors, and not employees.
Hawaii also requires all business-owned vehicles to be covered by commercial auto insurance. Other types of business insurance that business owners should carry depend on the specific industry.
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.
Request a free Hawaii Nightclub insurance quote in Ahuimanu, Aiea, Ainaloa, Anahola, Captain Cook, Eleele, Ewa Beach, Ewa Gentry, Ewa Villages, Haiku-Pauwela, Halawa, Haleiwa, Hanamaulu, Hanapepe, Hauula, Hawaiian Acres, Hawaiian Beaches, Hawaiian Ocean View, Hawaiian Paradise Park, Heeia, Hickam Housing, Hilo, Holualoa, Honalo, Honaunau-Napoopoo, Honokaa, Honolulu, Iroquois Point, Kahaluu, Kahaluu-Keauhou, Kahuku, Kahului, Kailua, Kalaheo, Kalaoa, Kaneohe, Kaneohe Station, Kapaa, Kapaau, Kapolei, Kaunakakai, Keaau, Kealakekua, Kekaha, Keokea, Kihei, Kilauea, Koloa, Kualapuu, Kula, Lahaina, Laie, Lanai City, Lawai, Lihue, Maili, Makaha, Makakilo, Makawao, Maunawili, Mililani Mauka, Mililani Town, Mokuleia, Mountain View, Nanakuli, Nanawale Estates, Napili-Honokowai, Ocean Pointe, Orchidlands Estates, Paia, Pearl City, Princeville, Puhi, Pukalani, Pupukea, Royal Kunia, Schofield Barracks, Volcano, Wahiawa, Waialua, Waianae, Waihee-Waiehu, Waikapu, Waikele, Waikoloa Village, Wailea, Wailua, Wailua Homesteads, Wailuku, Waimalu, Waimanalo, Waimanalo Beach, Waimea, Waimea CDP, Waipahu, Waipio, Waipio Acres, West Loch Estate, Wheeler AFB, Whitmore Village and all other HI cities & Hawaii counties near me in The Aloha State.
Also find HI local small businesses by General Liability Class Code and learn about Hawaii small business insurance requirements for general liability, business property, commercial auto & workers compensation including HI business insurance costs. Call us (808) 300-0578.