Starting a bar or venue can be an exciting time, but in doing so, you’re taking on a big responsibility to protect your investment. That’s why it’s important to have insurance, so you can keep your business safe and secure.
In this blog, we’ll explore some of the key covers you should consider when opening a bar or venue.
Public liability insurance should be a priority when operating any business where members of the public are likely to be present in high numbers. Not only will you be hosting people at your bar or venue, but those people could also be drinking, eating, dancing, or taking part in other activities – all of which could increase the risk of an accident occurring.
This insurance covers you in case you’re sued for damage to property and injury to members of the public as a result of your actions, or through the use of your premises.
What could go wrong?
Imagine a customer spills a drink, but nobody notices, so it isn’t cleaned up immediately. Another customer walks back from the bar and slips on the wet floor. They land, the glasses smash, and the customer ends up with a nasty cut that requires A&E treatment. The end result is a legal action made against the venue by the customer for injuries sustained.
Employers Liability Insurance is the next fundamental area of cover for you and your business. It provides protection for any accident or illness to an employee, a volunteer, part-time staff, or anyone under your guidance. This insurance is a legal requirement in the UK, otherwise you could be prosecuted and fined.
What could go wrong?
Perhaps an employee has been instructed to bring some crates up from the stockroom. Whilst carrying the crates back to the bar, the employee trips and falls over some boxes that were blocking the walkway, resulting in a broken wrist and time off work. The employee then sues his employer as they’re responsible for ensuring a safe workplace environment.
Bars and venues can be expensive to fit out, and usually involve flooring, lighting, counters, and kitchen equipment. These fixtures and fittings should be insured – fixed glass is also normally protected. When leasing premises, double check what fixed items you’re responsible for insuring, as that will dictate whether the property should be under your policy, or your landlord’s.
You also need to consider the general contents, like tables and chairs or artwork and decorations; the physical stock to be sold, such as food or drink; and the technical equipment, whether that’s computers and tablets, AV installations, or more complex EPOS systems. All of this can, and should, be insured.
Property insurance itself protects against various issues, such as fire damage, escape of water, or loss following a break-in. Comprehensive property insurance can prevent an expensive bill when the unfortunate happens. Be sure to accurately assess the total replacement value of your assets and keep your insurers up to date with these amounts, that way you’ll be adequately compensated should the worst happen.
What could go wrong?
Say you walk into your venue in the morning and discover a mess – it turns out you were broken into overnight. As well as damaged windows and a broken door, your sound system and speakers have been stolen. Fortunately, you’re insured. Unfortunately, you didn’t update your insurers on the property values at renewal, leaving you underinsured.
You submit a claim and the insurer sends a loss adjuster who checks the property values against the policy. You’re subsequently advised that the sums insured are insufficient, meaning insurers will apply average, leaving you out of pocket for a large portion of the loss.
In the event of an unexpected issue, such as a fire or break in, your bar or venue may need to temporarily close, leading to a loss of revenue. Business Interruption insurance can help to cover this loss of income and any ongoing expenses during the period of closure – ultimately helping you to stay afloat.
As well as stepping in when there is damage to, or theft of, your property, Business Interruption usually offers some handy additional extensions. For example:
Denial of Access
Covers potential revenue lost from you, and your customers, being unable to access your premises. This could be due to a serious accident in the street outside requiring a police cordon, or a public authority needing to prevent access while a neighbouring building is verified safe following a vehicle impact.
Loss of Attraction
Specific to public attractions, including venues and bars. It covers potential revenue lost due to a reduction in footfall following certain events, such as if there was a murder at the premises the week before.
Covers potential business closure caused through failure of utilities, such as electricity or water, making it unsafe or impossible to operate the business.
What could go wrong?
Imagine you run a café near a busy city centre which has regular footfall. Following some civil unrest in the city, damage is caused to a number of buildings, vehicles, and power lines. The authorities decide to close off the area to remedy the problem and complete repairs. Due to this, your business is forced to close for three weeks, and you lose revenue as a result. Fortunately you have comprehensive business interruption cover which steps in.
Loss of Licence
As you might imagine, Loss of Licence is a useful cover if your business sells alcohol. This insurance protects you against losses from having your licence revoked, and can cover costs incurred when re-applying for your licence.
Licences can be revoked by local authorities for a number of reasons, such as crime or disorder – sometimes when there was little that could be done to prevent it.
In today’s largely cashless world, insurance for money in or out of the premises is utilised less and less – yet many bars and venues still use cash. When they do this, it has to be stored on the premises at times, and transported for deposit at banks.
Fortunately, most insurers automatically include cover for money with pretty reasonable limits that can often be increased where required.
RiskBox’s final thought
It’s essential to prioritise comprehensive insurance coverage when opening a bar or venue. By having the aforementioned policies in place, you can protect your business from potential risks, and focus on creating a safe and enjoyable experience for your customers.
Remember, insurance requirements may vary based on many factors. So it’s always wise to ask your broker or insurer directly to get the best guidance. To speak with the friendly team here at RiskBox, call us on 0161 533 0411 or fill in our contact form.
Agencies - September 25, 2023
Blog - September 11, 2023