Get the Right Insurance Policy for Your Business
Obtaining a business insurance policy for a bar, tavern, night club, or any liquor establishment requires a great deal of planning. any business that plans on selling alcohol to the public, whether it is a bar, tavern, or night club, needs detailed insurance planning.
Start planning for your risks by answering the following questions:
What is the true value of the property, the fixtures and the contents of the bar?
Figure out what it would cost you to replace the building, fixtures, coolers, stock, decor, and operations equipment at today’s value.
What percentage of the sales will be in alcohol?
An insurance company will require evidence of your sales, alcohol and food. As a general rule, if your alcohol sales accounts for 50% or more of your total sales, your risk as well as your premiums will be higher. You must keep track of these percentage in order to make sure that you are charged and pay the correct premium to the insurance company.
Will your establishment have recreational games or diversions at the bar?
Your premiums will be much higher and you may be excluded from coverage from some insurance companies. Examples are “pyrotechnic displays, moon bounces, trampolines, rock walls, swimming pools, foam machines.”
Will there be employees?
If you have employees that work at the business, you will need to have workers’ compensation insurance and you may want to consider health insurance benefits as well.
What are your states dram shop liability laws?
Laws differ state to state as to the liability of the bar owner for an injury to a third-party caused by an intoxicated patron at your establishment. You should discuss this potential liability with a knowledgeable restaurant and bar lawyer in your state.
Will a vehicle be used in the course of the business?
Vehicles used for commercial purposes are not covered by personal auto policies so an additional commercial auto policy will be required.
Is the business in an area that is prone to natural disasters?
Beach’s are a great place to visit and vacation, but hurricanes and severe storms can wipe out beach front patios and bars in a blink of an eye. You must consider if your establishment is located in an area subject to natural disasters such as flooding or storms.
Will your establishment serve food?
Consider if your bar will prepare and serve food.
The size of bar, gross receipts, and percentage of gross receipts attributed to alcohol sales will dictate the types of insurance necessary for the bar and the amount of premium required to maintain coverage.
When meeting with an insurance professional you will need the following documents:
- Addresses of all locations
- Copies of relevant leases
- Names and addresses of all landlords
- Names and addresses of any location where your employees operate as contractors
- How each location is constructed (masonry, metal, or wood)
- Whether the location has sprinklers
- Square footage and the type of space
- The number of floors in the structure