Tavern Insurance Michigan Policy Information
Tavern Insurance Michigan. Adult libations, tasty morsels, and maybe even live music and events; there's nothing like a local "watering hole". If you're planning on opening up a tavern, you want to make sure that you set yourself up for success.
Taverns sell alcoholic beverages by the bottle, glass or pitcher which are consumed on the premises. They are generally open late into the night. There may be a full-service restaurant or some hot, house specialties. Contrary to taverns in the past, lodging rooms are rarely available at taverns today.
The tavern may feature contests, music, or other live entertainment, or promotions such as "happy hour" with discounts available during non-peak hours. A cover charge of minimum drink purchase requirement may be imposed at peak times. Some MI taverns have small dance floors.
While choosing the perfect location, ordering and setting up the furniture, making sure that you have a nice selection of ales and spirits, hiring and training a competent staff; there are so many things that need to be done before opening day.
When you're setting up shop, there's something else that's extremely important that you don't want to overlook: insurance.
Just like any business in any industry, taverns need to be properly insured. Why and what type of policies do you need to carry? Read on to find out more about the available types of tavern insurance Michigan.
Tavern insurance Michigan protects your business from lawsuits with rates as low as $67/mo. Get a fast quote and your certificate of insurance now.
Why Do Michigan Taverns Need Insurance?
Tavern owners face many of the same risks that business owners in any other industry face; however, you face some unique risks, too. Slips and falls, theft and vandalism, and even the classic bar fight; there are so many things that can go wrong, and when they do, as the owner and operator of your tavern, you'll be responsible for the expenses that are associated with any mishaps that occur.
As you can imagine, repairing damaged property, legal defense fees, settlements, medical expenses, and various other costs that you could be held liable for can really add up. If you have to pay those expenses out of your own pocket, you could be looking at serious financial losses.
If you're insured, instead of having to pay for the costs that are related to any mishaps that might occur yourself, the company that carries your tavern insurance Michigan policies will cover the expenses for you. In other words, insurance can help to protect you from major financial devastation.
Plus, in order to legally operate, MI taverns are required to carry certain types of coverage, and if you fail to carry those policies, you could end up facing stiff penalties and there's a chance that your business could be shut down.
What Type Of Insurance Do MI Taverns Need?
In order to operate smoothly and efficiently, and to protect yourself, your staff, your customers, and anyone else who associates with your tavern, there are several types of insurance policies that you can invest in.
Some policies are mandated, while others are voluntary, yet are still a wise investment. While the type of coverage you'll need depends on where your tavern is located, the size of the facility, and what type of services you offer (among other factors), here's a look at a few examples of the basic types of tavern insurance Michigan you should invest in:
- Commercial Property: This policy protects your tavern from losses that occur as a result of physical damage to the property; damages that are caused by acts of nature, theft, or vandalism. Not only will it pay for any repairs that the physical structure of your tavern may require, but it will also help to pay for repairing or replacing any equipment and other items located within the building that may have been damaged or stolen.
- General Liability: This tavern insurance Michigan coverage will protect your tavern against claims or lawsuits that may be brought up by third parties, such as patrons or vendors. These claims or suits can include property damage or physical injuries that may be sustained on the property of your tavern. It will cover any legal defense fees, as well as any settlements or compensation that you may be liable for.
- Liquor Liability: General liability insurance won't cover claims that are filed against your business that relate to the sale of alcoholic beverages. That's why you need to have a liquor liability policy, which will cover legal fees, settlements, damages, and any other expenses that could be related to legal action taken against you that may be related to the sale of liquor.
- Workers Compensation: If your staff is injured on the job, workers' comp will cover any medical care that they may require. It will also reimburse them for any wages that your employees may lose if they are unable to work while they are recovering.
These are just some of the different types of tavern insurance Michigan policies that are needed. You can purchase individual policies; or, you might be able to invest in a package policy that bundles several different coverages together.
MI Tavern'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 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 to customers 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 rideshare or taxi service can be useful.
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 taverns tend to be minimum wage and turnover may be high. Company incentives to encourage long-term employment are positive signs of management control.
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 taverns 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 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 taverns 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.
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. Employee dishonesty normally centers on the stock rather than the money.
The sale of lottery tickets or other gambling devices presents a major temptation for employees. Taverns tend to have significant cash sales, so 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 holdups. 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.
Business auto exposure is generally limited to hired or non-owned from employees using their vehicles to run errands.
Tavern Insurance Michigan - The Bottom Line
To protect your business, employees and patrons, having the right tavern insurance Michigan coverage is vital. To see what types of policy options are available to you, how much coverage you should invest in and the cost - speak to a reputable commercial insurance broker.
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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