You’ve worked hard to open your own bar, so you want to make sure you protect your investment and the hard work of your employees through bar insurance.
Before choosing the right insurance policy, however, make sure you understand these six important things about how bar insurance works and what it can cover in case of an accident or theft in your establishment.
If you learn more about bar insurance before making any purchases, you can be confident that you’re getting exactly what you need and not something you don’t even want or need. If you’re considering purchasing bar insurance, here are six things you need to know about it.
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1) What is bar insurance?
Bar insurance is an important part of running a bar, pub, or restaurant. This type of business insurance covers liability and property damage claims from customers who may have been injured on your premises. It also provides coverage for theft and damage that might occur in your establishment.
2) If a customer gets hurt, who pays?
If a customer gets hurt while they are in your establishment, and it is not due to your negligence or from any of your employees causing injury, then you should be covered by insurance.
If a customer hurts themselves because of your negligence (i.e. there is an accident that happens because of a slip and fall), then you will be responsible for paying for all expenses related to their recovery, including medical bills and lost wages.
How much coverage do I need?:
The amount of coverage you need depends on how much money you make each year, how many employees work at your bar, and what type of alcohol you serve. For example, if you have a small bar with only one employee who serves beer and wine, then $1 million worth of liability coverage should suffice.
3) Does insurance pay if I get sued?
It can be hard to determine which insurance policy is best for your bar, but one thing you do need to consider is whether or not a policy will cover you if a patron sues you.
Some policies are strict and offer limited coverage, so it’s important that you review your options carefully before purchasing. It might be worth paying a little more upfront for an insurance policy that offers more coverage than others.
For example, some policies may only pay out damages up to $100,000 while others may pay up to $1 million. Check with your provider on what they cover in terms of third-party liability issues.
If a patron slips and falls in your establishment, even if they don’t sue you directly, their medical bills could put you in hot water financially unless you have proper insurance protection.
4) Does my state require me to have liability coverage?
Many states have regulations that require a variety of businesses, including bars, restaurants, and other alcohol-serving establishments, to carry some form of liability insurance.
If you’re thinking about opening a bar or restaurant in one of these states, it’s important that you understand your state’s particular requirements.
While bar insurance isn’t typically required by all 50 states, there are still certain situations in which it could be extremely beneficial.
5) How much will it cost me?
One of your biggest questions is likely how much bar insurance will cost. Unfortunately, there’s no way around this one: you’ll have to contact several providers for quotes.
Since each insurer has its own rate structure, it’s impossible to know exactly what you’ll pay without talking directly with an agent. However, you can get a good idea of pricing by looking at average rates across different states and industries.
For example, here are some recent averages from our database: $1,500 per year for liquor liability coverage; $7,500 per occurrence for liquor liability coverage; $3,000 per year for personal injury protection (aka general liability) coverage; and $2,000 per occurrence for general liability coverage.
These numbers represent averages from small-to-medium size bars in various states—your mileage may vary depending on location and other factors.
6) Tips for getting started.
The first step to purchasing bar insurance is working with a company that can provide you with quality coverage.
Before choosing one, ask about their experience in helping owners secure insurance for bars and their knowledge of laws in your state.
Ask how long they’ve been in business and if they belong to any professional associations or trade groups.
Make sure you thoroughly read all documentation for bar insurance before signing anything.
As a bar owner, insurance is something you cannot afford to leave out of your business plan. Don’t jump into purchasing insurance without doing some research first.
There are many variables that go into buying insurance, and they aren’t all easy to figure out. Fortunately, with research and advice from bar owners in similar situations as yours, finding adequate coverage shouldn’t be too hard.
Do yourself a favor and make sure you understand what kind of insurance you need before making any purchases. Your business depends on it!