As a bar owner, you know how much fun it can be to have a night out on the town. People love to get together with their friends and family and have a couple of drinks, maybe shoot some pool, munch on some delicious food, maybe do some dancing, and just let loose.
Unfortunately, there are some cases where the customers of your business can pose some risk. Whether this is because they have had too much to drink and stumble and fall, someone sober slips on a spilled drink, people fight, or any other unforeseen circumstances can cause a lawsuit to be brought against your business.
Besides the liability associated with owning a bar, some other things can happen too that can make it difficult to focus on running your business. Employees can be injured, the equipment can fail, if you serve food someone could be unintentionally poisoned, or the bar itself could be damaged by fire, wind, vandalism, etc.
Even if you have the most comprehensive safety plan in place, dealing with the public in any capacity poses risks to your business. Regardless of the untoward incident that occurs, you must have the proper insurance protection in place to make sure that you can stay in business and continue to reap the profits.
Even though the majority of people tend to drink to celebrate an occasion like a birthday, work promotion, marriage, and even divorce it is the reality that these celebrations can turn quickly into something else. Life lesson number one is that you can't control other people, especially customers. Because of this, and adding alcohol, there will be situations that cause you trouble inevitably.
A customer could simply bump into another and depending on how much that person had to drink it could irritate them to the point that they start a fight. Intoxicated people can dance the night away and not pay attention to where they are stepping, and could slip and fall for many reasons. Another unfortunate reality is that people will drive home after they have been drinking. If they cause an accident and seriously injure someone, or even themselves, you could be held liable.
Although your customers are responsible adults, there are times when they will do bad things and you will have to pay for them. A big cost associated with these lawsuits is defense costs. Even if you can prove that maybe they were intoxicated before they arrived at your business, it will end up costing you tens of thousands of dollars in attorney fees and court costs.
Even though you may not be directly involved in the number of incidents that can occur at your establishment, you will be held liable for the actions of your customers. It is an unfortunate reality and maybe unfair, but you need to be prepared as a bar owner to deal with these issues. Liquor Liability insurance will pay to defend you in a lawsuit, as well as pay for the damages caused by your patrons because of the liquor they had been served.
While Liquor Liability insurance may be a huge part of your insurance program, and the number one thing you think about, some other insurance policies are critical for your business to be fully protected. Here is a comprehensive list, but please be aware that this is not all-inclusive. General Liability – Bodily injury and property damage coverage for those instances that are not directly related to the alcohol you serve. For example, a vendor is delivering your supplies and slips and falls on the premises.
Commercial Property – You will want to cover your building if you own it, and all the stuff inside which is considered your business property. Any physical damage done to your property that is caused by a covered peril will be repaired. Be sure to pay attention to the cause of loss, whether actual cash value or replacement cost.
Equipment Breakdown – This essential coverage can usually be added to the Commercial Property insurance policy, but covers the breakdown of your equipment due to power surges, mechanical failure, combustion, etc. Often, it will include spoilage coverage because, in the bar industry, it is usually refrigeration equipment. If you store food or alcohol that needs to be kept cool and have a mechanical failure, you will have to throw away all of that product which can cost a lot of money. Equipment Breakdown may pay to replace or repair the equipment and the product if it is structured properly.
Business Interruption – If your bar sustains a fire that causes you to close, you will probably lose out on some income. To avoid closing down for good if this happens, you can purchase Business Interruption insurance to cover this exposure. It will also allow you to keep those key employees that keep your business going, by being able to still pay them a salary if you are shut down for some time.
Workers Compensation – If you have employees you should carry Workers Compensation coverage. In the food service industry, especially a bar where things often get spilled, employee injuries are common. Workers Compensation will pay their medical expenses and lost wages if they become injured or ill while working for you.
Employment Practices Liability insurance – Speaking of employees…they can cause a risk to your business too. With lawsuits claiming discrimination and sexual harassment on the rise, you must protect yourself from them. Not only does Employment Practices Liability provide coverage for discrimination and harassment, but also wage issues, wrongful termination, breach of contract, and emotional distress just to name a few. Even if these allegations are proven to be false, you will have to defend yourself in a court of law which can cost a lot of money, but Employment Practices Liability insurance will pay to defend you.
Data Breach – Chances are you take credit card payments in this day and age. While this is a great service to offer your customers, who are probably not carrying cash anymore, it can present a risk. With hackers, skimmers, and thieves there is a risk that your customers' credit card information will be stolen. Data Breach insurance will protect if someone sues you because of a data breach, and also for the expenses related to notifying those affected, which is a requirement in almost every state. Additionally, Data Breach insurance will often provide credit monitoring for some time for those affected by it. Sometimes this coverage can be found as part of Cyber Liability insurance, which is an additional coverage to consider if you store any customers' private information.
Each bar is going to have its own unique operations, size, and way of doing business. Some bars may have one employee while others have 50. Some may be part of a restaurant or be a small hole in the wall type place. While most bars will need a lot of the same insurance policies, that will not be the case every time. Some factors that the insurance company will take into account when pricing insurance policies for a bar include:
The best way to get an idea of how much insurance is going to cost for your bar is to work with an educated insurance professional who can compare rates for you. Having access to multiple insurance carriers will help to make sure that you get the best coverage for the best price. It also allows you to be able to customize your insurance portfolio based on your specific needs. CoverWallet has a team of experienced insurance professionals that can do just this. And will be hassle-free and absolutely no pressure.
Restaurants and bars are a great industry serving the public with delicious food and alcohol. While most of the time your bar will operate without incident, it is unfortunately inevitable that you will have to deal with some sort of incident at some point. While it may feel like just another thing to spend money on, you should really look at it as an investment. An investment that will protect your business from some major damages resulting from a lawsuit, and investment protecting your property, and an investment protecting your employees.
Your bar is probably a big part of your life and you are passionate about it. Protecting what you love and are passionate about is a necessary step in being a successful business owner. Don't let one intoxicated patron who doesn't even realize what he is doing take down your business. Be prepared for all of the possible situations, or at least as many as you can be.