Bar Insurance Policy Information
Bar Insurance. 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.
Bar insurance protects your establishment from lawsuits with rates as low as $97/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked bar insurance questions:
- What Is Bar Insurance?
- How Much Does Bar Insurance Cost?
- Why Do Bars Need Insurance?
- What Type Of Insurance Do Bars Need?
- What Does Bar Insurance Cover & Pay For?
What Is Bar Insurance?
Bar insurance, also known as tavern insurance, is a type of liability insurance that provides coverage for bars, taverns, and other types of establishments that serve alcoholic beverages. The insurance covers against losses and damages that may arise from accidents, injuries, or other incidents that occur on the premises. This may include liability for property damage, medical expenses, and legal fees incurred by the bar.
The insurance also provides coverage for damage caused by patrons or other third parties while on the premises. Additionally, bar insurance may provide coverage for losses incurred from theft, fire, and other types of damage to the establishment.
How Much Does Bar Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small bars ranges from $97 to $119 per month based on location, seating capacity, hours open, drink prices, payroll, sales and experience.
Why Do Bars Need Insurance?
Bars need insurance for several reasons:
Liability protection: Bars serve alcohol and therefore, have a risk of liability for any damage or injury caused by patrons. Insurance can provide coverage for the bar owner in case a patron becomes injured or causes damage while at the bar.
Property damage: Bars are exposed to the risk of property damage from fire, theft, and other unexpected events. Insurance can provide coverage for property damage in case of such incidents.
Food contamination: Bars that serve food can be exposed to food contamination claims. Insurance can provide coverage for such incidents and help the bar owner cover the costs of lost income, legal fees, and any settlements.
Business interruption: In the event that a bar is forced to shut down due to a covered loss, insurance can provide coverage for lost income and other related expenses.
In conclusion, bars need insurance to protect themselves from financial losses in case of unexpected events or incidents that could potentially harm their business.
What Type Of Liability Insurance Bars Need?
Here is the list of insurance types that bars typically need:
- General Liability: To protect against claims of property damage or injury to a customer.
- Liquor Liability: Covers the bar in the event of a customer getting into an accident or causing damage after leaving the bar.
- Workers Compensation: Provides benefits to employees if they get hurt or become ill while on the job.
- Commercial Property: Protects the bar's physical property, such as its building, equipment, and furnishings, against damage or loss.
- Business Interruption: Covers the bar's lost income and expenses if the business has to close temporarily due to a covered event.
- Cyber Liability: Protects against data breaches, hacking, and other cyber threats that can harm the bar's reputation and financial stability.
- Umbrella: Provides additional liability coverage above and beyond the limits of the bar's other insurance policies.
These are the common insurance types that bars need, however, the specific insurance requirements may vary depending on the type of bar, its location, and the laws in the area.
Tavern'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.
What Does Bar Insurance Cover & Pay For?
Bars, like any other business, can face legal liabilities and potential lawsuits for various reasons. Some common reasons bars may be sued include:
Liquor liability: Bars may be held liable for over-serving patrons who then cause harm to themselves or others, such as through drunk driving accidents or alcohol-related injuries. Insurance, such as liquor liability insurance, can provide coverage for legal defense costs and potential damages awarded in such lawsuits.
Example: A patron leaves a bar heavily intoxicated and causes a car accident resulting in injuries to others. The injured parties file a lawsuit against the bar for over-serving the patron. The bar's liquor liability insurance can help cover the costs of legal defense and any damages awarded.
Premises liability: Bars can be held liable for injuries or accidents that occur on their premises, such as slip and fall accidents, inadequate security leading to assaults or fights, or other safety hazards. General liability insurance can provide coverage for legal defense costs and potential damages awarded in premises liability lawsuits.
Example: A patron slips and falls on a wet floor in a bar, suffering injuries. The patron files a lawsuit against the bar for negligence in maintaining a safe premises. The bar's general liability insurance can help cover the costs of legal defense and any damages awarded.
Employment practices liability: Bars may face lawsuits related to employment practices, such as wrongful termination, discrimination, or harassment claims by employees. Employment practices liability insurance can provide coverage for legal defense costs and potential damages awarded in such lawsuits.
Example: An employee of a bar files a lawsuit against the bar, alleging wrongful termination based on discrimination. The bar's employment practices liability insurance can help cover the costs of legal defense and any damages awarded.
Intellectual property infringement: Bars may face lawsuits related to the use of copyrighted or trademarked material without proper authorization, such as playing copyrighted music without a proper license or using a trademarked logo without permission. Intellectual property infringement insurance can provide coverage for legal defense costs and potential damages awarded in such lawsuits.
Example: A bar is sued by a music licensing organization for playing copyrighted music without a proper license. The bar's intellectual property infringement insurance can help cover the costs of legal defense and any damages awarded.
In each of these examples, insurance can help protect bars by providing coverage for legal defense costs, as well as potential damages awarded in lawsuits. It's important for bars to carefully review their insurance coverage and work with insurance professionals to ensure they have appropriate coverage to mitigate potential legal liabilities and protect their business.
Commercial Insurance And Business Industry Classification
- SIC CODE: 5813 Drinking Places (Alcoholic Beverages)
- NAICS CODE: 722410 Drinking Places (Alcoholic Beverages)
- Suggested Workers Compensation Code(s): 9084 Bar, Discotheque, Lounge, Nightclub or Tavern
5813: Drinking Places (Alcoholic Beverages)
Division G: Retail Trade | Major Group 58: Eating And Drinking Places | Industry Group 581: Eating And Drinking Places
5813 Drinking Places (Alcoholic Beverages): Establishments primarily engaged in the retail sale of alcoholic drinks, such as beer, ale, wine, and liquor, for consumption on the premises. The sale of food frequently accounts for a substantial portion of the receipts of these establishments.
- Bars (alcoholic beverage drinking places)
- Beer gardens (drinking places)
- Beer parlors (tap rooms)
- Beer taverns
- Beer, wine, and liquors: sale for on-premise consumption
- Bottle clubs (drinking places)
- Cocktail lounges
- Discotheques, alcoholic beverage
- Drinking places, alcoholic beverages
- Night clubs
- Saloons (drinking places)
- Tap rooms (drinking places)
- Taverns (drinking places)
- Wine bars
Bar Insurance - The Bottom Line
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.
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
- Coffee Shop
- Concession Stand
- Farmers Market
- Grocery Store
- Ice Cream Shop
- Internet Cafe
- Liquor Liability
- Liquor Store
- Sandwich Shops
- Specialty Food And Restaurants
The food service industry is a vital part of the economy and plays a crucial role in providing food to individuals and businesses. However, it is also a high-risk industry that is prone to numerous potential liabilities and risks. That's why it's important for food service businesses to have insurance in place to protect themselves against financial losses and legal issues.
One of the main reasons the food service industry needs commercial insurance is to protect against liability claims. When running a food service business, there is a risk of someone getting sick or injured due to food poisoning or food allergies. Insurance can provide coverage for these types of claims, helping to cover the costs of legal fees and damages.
Another reason the food service industry needs insurance is to protect against property damage. This can include damage to the business's physical location, such as from a fire or natural disaster, or damage to equipment, such as kitchen appliances. Commercial insurance can help cover the costs of repairs or replacement, ensuring that the business can continue to operate smoothly.
Additionally, commercial insurance can provide coverage for losses due to unexpected events, such as theft or vandalism. This can be especially important for food service businesses, as food products and equipment can be expensive to replace.
The bar and liquor industry is highly susceptible to accidents and injuries. With the presence of alcohol, there is a higher risk of slip and fall accidents, fights, and other mishaps that could result in serious injuries to employees or patrons. Insurance can provide coverage for these types of incidents and help protect the business from financial liability.
In summary, business insurance is essential for the food service industry due to the numerous risks and liabilities that can arise. It can provide financial protection against potential losses and legal issues, helping businesses to operate safely and securely.
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.