Back bar design ideas are vital to the efficiency of your bar whether you own a small hole-in-the-wall style dive or a large dance club. Making effective use of your back bar space is vital to properly managing your establishment, increasing your worker’s productivity and maximizing the earning potential of your business. Having a well-organized back bar not only minimizes waste, but also opens up new options for you as a business owner.

Here is a list of the top ways that you can improve the efficiency of your back bar:

1. Use Overhead Glass Rack: An overhead glass rack is one of the best choices you can make when it comes to maximizing your back bar space. An overhead glass rack both saves you counter space in the back bar and decreases the number of breakages—especially when it comes to fragile Wine Glasses.
2. Choose Proper Equipment: From beneath bar Kegerator to back bar coolers, both which equipment you choose to have and their sizes make a big difference in terms of space use. You always want to be sure to choose equipment which does not stick out and does not get in the way of your bartenders (don’t forget to leave room for bartenders’ feet—uncomfortable bartenders don’t provide good service for long). Remember to get coolers with sliding doors so bartenders don’t trip.
3. Don’t Use the Bar as a Storage Area: If you have the choice, keep all extra liquor and ingredients out of the back bar and in a storage room. Although this may not be possible this is a big help for most bars. Not using your back bar as a storage room, allows you to have smaller back bar coolers and gives you a number of better options as far as back bar design ideas. Bartenders should have individual speed racks with all their main ingredients and keep only what they need for the shift in small beneath bar refrigerators.
4. Use Multiple Cash Registers: Here is a big time saver—two Cash Registers —one at each end of the bar, so that bartenders do not have cross past each other to make change.
5. Create Bartender Stations: Bartender Stations are vital both to efficiency and for inventory and quality control. Creating individual stations for bartenders keeps bartenders from waiting on each other and from having to look for items the other bartender may have swiped. In addition, if you want to make sure all your bartenders are pouring exactly the same proportions, having stations for each makes this much easier to monitor.
6. Let Servers Handle the Easy Orders: Along similar lines, let waitresses and runners poor the beers and/or the wine glasses and let the bartenders make the real drinks—the ones that actually allow them to use their bartending skills. If it only has one ingredient, then you probably don’t need a trained professional to mix it.


Photo Courtesy of JD Harvill (via Flickr)

7. Use the Under Bar Space Properly: Make sure that the underbar space is used correctly. Don’t place mixing boards above the ice maker. Don’t put back bar refrigerator right beneath the cash register or in under a bartender station that is always being used. Think through the motions of your workers and try to limit the amount of interference in your back bar.
8. Use Runners: If you have a particularly busy bar, makes sure that you use runners to lend your bartenders support emptying trash bins, replenishing ingredients, doing quick spot cleans and all the things that take your bartender away from his or her primary duties—making drinks.

Following these guidelines will help you to make your back bar runs smoothly, increase your profits and improve the happiness of your bartenders, minimizing turnover at that key position.

Choosing a bar cash register—or till as it is quaintly called in England still–may seem like a small matter when it comes to the overall success of your bar, but believe it or not, it makes a bigger difference than you might think.

What is your first line of defense against theft (both external and from your own employees)? What can keep a club from growing effectively and lead to the kind of poor service that drives customers away? What is your best friend when it comes to keeping track of inventory?

Yes that’s right. Your bar cash register can do all that. Your cash register or point of sale is the spot where the money actually exchanges hands and although this may seem like a minor aspect of the monetary transaction, making it efficient and orderly is important to success of not only bars but all for-profit businesses.

So whether you have a computerized PoS system hooked up to multiple bar cash registers spread throughout your bar or you have a just a good old fashion brass register like the kind you might see in the saloon in a cowboy flick, it is important to spend a bit of time thinking about the cash register and how you use it.

Cash Register Placement

Bar Cash Register (courtesy of Infrogmation, via Flickr)

One thing you may no doubt have noticed, is that in the majority of cases, the point of sale—your cash register in a traditional bar–is placed on the back bar and centered. (The second most popular location being the end of a bar by the section that lifts to allow easy access behind the bar or, if you have a bar and grill, by the wait person’s pick-up station.)

Why is this location so popular, and is it worth it?

Back bar is the best location for cash registers for two reasons:

• First, counter space=money. If you place your cash register on the counter you are taking up valuable counter space. Most customers will simply not want to sit in front of a cash register that is blocking their view. A poorly spaced cash register can take up the place of one, sometimes even two bar stools?
• Second, there is a theft risk on the counter. Placing the cash register on the counter makes it a lot easier for customers to reach over and do a grab-n-run. One sloppy employee transaction, or a distraction (a glass breaking behind them) and the thief is off with a wad of money. This is a much bigger commitment for the thief than jumping the bar and then jumping back.

Improving Cash Register Efficiency

Beyond the simple placement of your point-of-sale, there are also a number of steps you can take to improve efficiency with your bar cash register. For example, just like a cashier register at most restaurants, most registers these days—even if they are not fully optimized with the full gamut of cutting edge options of a top-level PoS system—will have memory functions that allow you to program certain keys for certain high frequency items—so that you only need one touch to ring them up.

If you are a basic bar that sells a few different kinds of beer, having that easy to use method will save you and your employees quite a bit of time in the long run.

If you have a larger establishment or growing establishment, having multiple registers at multiple locations, will also increase efficiency since you will not create bottle necks at the bar cash register, slowing down customer service and delaying other customers’ service as wait people sit twiddling their thumbs. (This is also the time to seriously consider getting a fully integrated Point-of-Sale system for your bar or nightclub.)

Individualizing Cash Register Users with the assigned Cash Drawer

One of the best ways to create thieves among your employees is to let there be too many hands in the till. Although there are some employees who will try to steal from you no matter what precautions you take, you greatly increase your chances of having thieves among your employees when you allow multiple employees to have access to the bar cash register without proper oversight.

The best way to limit problems of theft is to make sure there is one assigned user to each cash drawer. When there is a switch in shifts, you switch out the cash drawer and take account of the tickets for it. Some bars have a trusted manager at the cashier register giving out all the change so that there is only one person for each cash drawer and thus the responsibility is focused on that one person.

(Of course, as you will see a computerized Point-of-Sale system—PoS—can also be effective because it forces employees to enter their individualized code when they use the register thus recording the amount of the transaction and when it occurred.)

For more on security measures for your bar or nightclub see: Bartender Theft.

Inventory and Promotions

Keeping careful track of sales can be helpful for several reasons:

• First, it can help you track inventory—especially if you have a new promotion and it is doing particularly well for a particular drink, the register will give a good sense of whether you have increased sales overall and if it is due to the promoted drink. This can also mean that you need to order more of that drinks ingredients if you see that the rate you are using up that ingredient will outstrip what you have in stock.
• Second, you may also begin to notice useful patterns according to time of day. If you are selling a lot of martini’s to lawyer types at lunch, it may be useful to put up a lunch sign to promote this to others with similar tastes who may be walking by at that time.
• Third, sales receipts can also help determine whether you have hit the right price points. Undersold drinks may be overpriced, or you may have priced a very popular drink too low.

All of this, however, can be done even more simply with a bar PoS system that automatically records this kind of data so you do not have to go searching for it. In the 21st century, there is little excuse for not knowing exactly what is happening on the business end of your bar business.

Want to find out more about PoS systems that bring technology to you? Just sign up for a membership and I will send you a notice as soon as I publish my forthcoming article on it.

When you are starting to think about how to at start a wine bar, it is important that you spend a fair amount of time in the planning stages. Learning how to start a wine bar can be more difficult than learning how to start other kinds of bars because wine bars are a much more specific animal than other kinds of drinking establishments.

Unlike when you are considering How to Start a Pub, a wine bar is simply not as amenable in terms of location. You can’t just drop down a wine bar in any neighborhood and make it work by tweaking the décor. You need to have a certain type of wine loving clientele to really make a wine bar work, and this kind of clientele is not everywhere. Not everyone is the perfect target for your wine bar business plan.

So what do you need to do to make sure that your wine bar is successful?

Be a Wine Expert

Owning a wine bar is also different from other kinds of businesses because it requires much more of the owner than just simply knowing the difference between a Merlot and a Pinot Noir and knowing what kind of wine glasses to pour them into. It requires the owner to have a deep love and knowledge of wine culture.

The kind of person who is perfectly suited to owning a wine bar is the person who knows what new wines are hot, which wines are unusual and how to present wines so that the patrons feel as if they are part of an experience. Everything from the look of the wine bar to the way wines are poured play into this, and if any of it is lackluster, a wine bar will fail to connect.

For this reason you must make sure that you are ready to commit fully to the world of wine, before you even begin creating your wine bar business plan.

Location

Part of what you will have to examine carefully is whether the location where you are planning your wine bar is capable of sustaining such an enterprise. If the location already has wine bars or other similar kinds of sophisticated bars (such as martini lounges for example) examine their performance and see if the area will support another similar bar. Visit these establishment on a couple of different nights and take note of the clientele and anything else that may seem relevant.

Unlike pubs and some other kinds of establishments, wine bars are rarely just walk-in kinds of places.

One of the most common places to start a wine bar is near wineries. Some of the most successful wine bars are those associated with a winery such as in Wine Country. This creates a built-in clientele. Wine-bars also tend to do well near arts districts where they can cater to the same kind of sophisticated clientele.

Décor

Photo Courtesy of Chris Jones (via Flickr)

Traditionally, the wine bar has a simple, sleek décor and is often well-lit. Small wood tables with white table tops, preferably with somewhat of a view. Occasionally you also find wine bars in spaces with faux French décor, making you feel as if you are in the cellars of a vintner or the Catacombs. This can make for a very romantic setting and create a pleasant date spot.

Staffing

One of the difficulties when you are trying to figure out how to start a wine bar, is hiring the right kind of staff. Everyone from bartenders to wait persons are a little bit different for a wine bar. First of all, you tend to have servers rather than bartenders, since in most wine bars there is not much in the way of mixed drinks. Don’t be fooled however, the servers must be every bit as knowledgeable as a bartender.

Owning a wine bar is a little bit like running a college department—you have to find people who are not only pleasant but that can really help your clientele to learn and appreciate wines. They have to present themselves well, be intelligent enough to interact with your clients while also knowing their wines, and they must also be salespeople selling new wines. You will never have every kind of wine so you must make sure that your servers can make suggestions from your clientele’s preferences (for example, “a wine like Merlot but fruitier”).

This can be a tall order for an average server, which means you will have to spend extra time and money finding, training, and retaining your serving staff if you want to be successful. (Be sure to include this consideration in your wine bar business plan.)

Entertainment

Of course, it need not be just about the wines. You can have entertainment. In wine bars it is usually more along the lines of jazz than rock, but if you are looking to break the mold you can try something different. (Unfortunately, I have not seen many successful attempts to make wine bars less sophisticated—the attempt usually drives customers away—but sometimes rules are made to be broken.)

Want to know how to start a pub? You know, the kind of laid back neighborhood bar where “everybody knows your name”? Well no matter what kind of bar you decide to start, owning a bar or pub is hard work and requires a lot of up front preparation and determination. They are long hours, so you should be sure that you really love the bar business to begin with.

So what do you need to know before you start a pub?

The Customers

One of the things that makes a neighborhood bar so appealing when it comes to owning a bar, is that few bars have as an across the board appeal as a pub. Starting a pub has the inherent advantage that it doesn’t turn away anyone. No matter if you are a hipster, a cowboy, a business person, or a frat boy, you will be equally comfortable downing a Guinness in a neighborhood bar—even if it isn’t really your neighborhood.

Of course, this is also the drawback of this kind of a drinking establishment. Since it appeals to virtually everyone, it doesn’t really target anyone in specific. This can lead to a complacent sort of a feeling about your neighborhood bar if you are not careful. As in, “Didn’t there used to be an okay sort of neighborhood bar here?”

That is why you need to actively work to build relationships with the locals who will be your main customers and look to make their experience as enjoyable as possible.

Décor

The traditional décor for the pub is lots of hardwoods—almost like an Old West saloon. If you are going for the Irish bar vibe, green will, of course, become the leitmotif when starting a pub in this style–soft lighting, a jukebox, a TV, and maybe pool tables and that kind of thing.

Location

Photo Courtesy of Ben Ostrowsky (via Flickr)

Location is key when you start a pub or any kind. Even though virtually anyone can be comfortable in this kind of a neighborhood bar, few will leave their neighborhood to go to a pub. A pub is more a place you go when you are already there. That means that either you have to be in a crowded urban neighborhood where people already lives, or somewhere people head out to for other reasons.

That is why, for example, you can find a fair number of bars (with a number of pubs among them) in virtually any financial district—businessmen (and some women) still like to get a drink and unwind before heading home from a hard day.

It is also helpful if you are in a location with foot traffic where you are likely to get walk-in’s who just happen by.

Staffing and Pub Grub

Because you are looking to draw customers into your establish before or after they have done something else (such as going to work or catching a movie), it is a good idea to offer some kind of simple comfort food—traditionally known as “pub grub.” This kind of simple meal will increase the chances customers come to your place rather than head somewhere else because they are hungry and not ready just to have some drinks.

Having food will of course effect how much staffing you need since preparing food adds a whole new dimension to service. Many pubs will have waitresses and a small kitchen staff. If this is more than you are looking to contend with, the usually peanuts will do, but you will definitely lose some opportunities this way.

Promotions

Owning a bar like a pub does require a bit of imagination however. If you are just the stereotypical neighborhood bar you are unlikely to get the kind of buy-in from your customers that will allow you to foster the kind of loyalty that is needed for a bar to have longevity. This is one reason why it is important to have the kind of staff that can keep your customers happy and involved.

The traditional promotions that help this along are trivia nights and live music offerings on the weekends. The trivia night has become a bit hackneyed and is a bit time intensive when done well. It really does require more than just breaking out the Trivial Pursuit board on Tuesday nights.

You shouldn’t just limit yourself to tradition however. Pubs don’t traditionally have dancing but no rules are written in stone. And live music can work as well—as it does for Molly Malone’s in LA (a favorite among some bands who got their start there).

If you feel like an 80’s night or a jazz night would work well for your location than go for it. Always stay aware of what you competition is up to as well, as they may have some good ideas for your place as well.

Never get complacent however. Pubs need to keep up with the times as well. Owning a bar is as much about keeping up with the times as any other profession.

Do you watch Urban Cowboy just to get more ideas for starting a cowboy bar? Do you sit around thinking up cool country western bar names or making playlists filled with the perfect sets of country bar music. If you have always had a thing for cowboy bars and have been think of opening one, well I reckon it may be high time to get off yer keyster, and get started mister. With property prices at their current lows, it might actually be a very good time for starting a cowboy bar.

So let’s think about what it takes to open a cowboy bar:

Location

You might think that the obvious place for a cowboy would be out in the country where you are more likely to find cowboys. Actually however, the most successful cowboy bars are in or at the edges of urban areas. The reason is obvious: population. If not many people live around the area then you are going to have difficulty attracting them to your establishment. In addition, rural areas tend to be so spread out that it is difficult getting people in great numbers to your bar unless you are in a city and they are coming anyway.

Another myth is that starting a country bar requires you to be in a traditional cowboy friendly place like Texas. Actually, however, you are in many ways better off starting your country western bar in an urban area where there isn’t any, because that will also mean you have no competition.

A good sign, generally that an area has a craving for cowboy bars is if they have a local country station that plays music but no country bar to serve that population. In some cases, of course, you may have to alter your conception of the traditional country bar to be really successful. For example, if you open a country bar in the hipster heavy Silver Lake neighborhood of LA, you will likely have to make things a bit exaggerated and kitschy if you are going to make it work. Similarly, if you open a country bar in the gay neighborhood of the Castro in San Francisco, your cowboys will be of a different variety altogether than in Houston.

Décor and Ambience

The décor for a cowboy bar is pretty classic saloon décor for the most part. A big bar with brass foot rests is usually the way it goes with maybe some mirrors and lots of hardwoods. Many country bars these days clear out the tables and leave ample room for live music and dancing. Some stick with mechanic bulls and pool tables. Many mix both elements.

Many non-cowboy bars will just go country for a night and then go back to being what kind of bar they regularly are, but if you can be the Real McCoy as they say, you should be able to stand out in your area. (Real McCoy’s by the way, is one of the classic country western bar names.)

Tip from the Pros: Speaking of classic country western bar names, it is usually best to keep it simple since most country bars have fairly straightforward names like the SF Saloon or the Rodeo. If you get too playful with names (like “Bucks and Broncos”), cowboy types might not be sure if you are trying for a hipster vibe and be turned off.

As to music, the more authentic you can make your music selection the better off you are. Bars that don’t do country full time tend to have their hackneyed country bar music playlist to try to get their clientele two-stepping in their barely scuffed cowboy boots.

One of the best things to have for a cowboy bar is live country bar music to really pack people in. Live country bar music really makes your bar feel down home for displaced Texans and will get people in the right mood.

Cowgirls Too

As with many kinds of bars, the key to success is drawing in the cowgirls as well as the boys. Having a Cowgirls night is therefore a good idea if you want to keep your place packed.

Another big draw for the gals is dancing. Without dancing, cowboy bars can feel a little like “The Accused” for gals, which is definitely not a draw. Put a dance floor in and some two stepping line dancing and cowgirls are sure to get into it more and this, in turn will draw more cowboys.

Combining Bar Types

As we mentioned earlier, combining bar vibes can sometimes really work for some cowboy bars. So, for example, having a cowboy sports bar where all the bartenders are cute cowgirls can really work to bring in the young males who like nothing better than sports and girls in costumes.

Similarly, a hipster cowboy bar where every cowboy bar detail is overdone almost to the point of ridiculousness can also work well if you are in a hipster sort of area. If you are in the middle of Dallas—maybe not so much.

It’s all about appealing to your audience. So round ‘em up and head ‘em out! Yeehaw!

For those of us not involved directly in the insurance business, figuring out what kinds of insurance for bars and nightclubs we need can be a bit of a pain. That said, there are some kinds of insurance that you will definitely want, while other kinds of bar and nightclub insurance might only be a necessity in certain situations.

So this is an overview article of all the types of bar and nightclub insurance you should have and consider having. Before I even begin, however, I should remind you that the kind of insurance you are required by law to carry will vary from state to state and city to city in some cases. You need to double check for the particulars in your particular area. This is only meant as a general overview.

Here they are then:

• Property Insurance: Property insurance is always a good idea, in case you should have an accident such as a fire. We discuss property insurance more fully in Commercial Insurance for a Bar or Nightclub. Though usually required, you should definitely carry this kind of insurance for bars.
• Public Liability Insurance: Public liability insurance covers third parties—such as your customers—who may be injured while at your establishment. If a customer were to fall down and break his or her hip in your restroom, for example, public liability insurance would protect your against your bar liability. Many bar owners believe falsely that the commercial insurance for a bar will cover these incidents but they do not. For more about the kinds of Public Liability Insurance for your Bar or Nightclub you need for your bar or nightclub see our article. It is definitely a good idea to have liability insurance as part of your overall bar and nightclub insurance package.
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  Photo Courtesy of Tom Purves

• Liquor Liability Insurance: In addition to regular bar liability insurance, you also need to include liquor liability insurance in your nightclub insurance package. Liquor liability insurance is A MUST! Liquor liability insurance is the kind of insurance for bars and nightclubs that protects them from any problems that may arise from the use of alcohol, including what may happen to customers after they leave your establishment. For more about this kind of bar liability insurance see our article: Liquor Liability Insurance.
• Disaster Insurance: Disaster insurance is a form of commercial insurance for a bar that covers the kinds of property damage that natural disasters like flood s, earthquakes and hurricanes can do to your establishment. Disaster insurance is not a must but can mean the difference between reopening after a natural event like a flood and throwing in the towel. This kind of insurance also covers damage from unusual events like riots for example. To find out more see our article: Disaster Insurance for Bars and Nightclubs.
• Theft Insurance: Theft insurance is highly recommended but is not a necessity. Theft insurance, if it is not included in your package, might be a good idea to get as an extra. It is not for the petty stuff but more for the armed robberies or break-ins that steal large amounts of inventory and furnishings. The smaller kinds of theft are more of a managerial problem. For more about theft insurance see our article: Theft Insurance for Bars and Other Employee Related Insurance.
• Worker’s Compensation Insurance: Many states require bars and nightclubs to carry worker’s compensation insurance which covers injuries to your workers. If your liability insurance covers your workers this kind of insurance may not be necessary. The Theft Insurance for Bars and Other Employee Related Insurance article above has a section about workers comp.
• Health Insurance: Health insurance is often beyond the means of small businesses. If however you get near or over 50 employees you may now need to carry this kind of insurance. With such a large group you may be able to get it for less however.

Although insurance will definitely add extra costs to the operation of your bar or nightclub they are a necessity for any establishment that wants to last. An uninsured business is just one unfortunate event away from disaster.

There are some additional advantages to having insurance as well however. Many insurance companies will help you run your bar or nightclub more safely and efficiently by offering free safety courses for your employees to help train them and discounts on policies and safety equipment. In addition, if you need to look for a loan or for a silent partner to help expand your business, one of the considerations they will use to evaluate your viability will be whether you carry insurance and have a well thought out liability plan.

Tip from the Pros When shopping for an insurance plan, it is a good idea to recruit an independent financial consultant to review the offerings you receive to make sure that you are getting the best deal possible. Because many aspects of insurance are idiosyncratic to the insurance companies (for example, how many other policy holders they have in your region) policy costs can vary wildly for reasons that have nothing specifically to do with you or your merits. An independent analyst can help you find the best option and save you money in the long run.

Bar theft insurance and other employee related insurance like worker’s compensation may seem like an unnecessary hassle, given how many insurance plans you may already be dealing with, but most bars find that they must carry various kinds of insurance related to their workers.

So what should you carry?

Theft Insurance for Bars?

Theft is a common problem for many bar owners. Employees will often steal drinks or make off with bottles from the inventory room. These kinds of smaller kinds of theft will definitely add up, but usually this is more of management problem.

This is not the kind of theft that you need bar theft insurance to handle. Theft insurance for bars has more to do with larger theft problems, such as having your bar looted, burglarized or robbed. These larger types of theft problems cannot be prevented as easily by security measures (though such security can help ward off some attempts). Security cameras, alarm systems and vigilance can help with these concerns, but the wise owner will also look to get some insurance as well.

Many bar and nightclub insurance policies will carry theft insurance as part of their property insurance coverage. However, you need to be careful since much Commercial Insurance for a Bar or Nightclub do not carry full theft provisions. For example, some insurance policies may not cover a theft that is initiated and carried out by your employees, which studies show are the vast majority of such episodes. Here is a brief checklist of the kinds of theft your insurance policy should cover:

• Employee Related Thefts: Since most thefts involve an employee at some stage, an insurance policy that does not cover employees is virtually worthless.
• Armed Robbery: Although most bar theft insurance policies cover armed robbery, some will sell it as extra especially if you are in a particularly dangerous area.


Photo Courtesy of Surian Soosay (via Flickr)

• Louting: Many people are surprised to learn that louting may not be covered in their nightclub insurance policies. Louting is sometimes sold separately as a form of Disaster Insurance for Bars and Nightclubs. Be sure to check if louting is included and decide whether it is worth paying extra for it.

Of course, bar theft insurance is not the only kind of insurance for bars and nightclubs that you need to deal with when it comes to your employees. Your small business insurance package will also have to have other kinds of bar and nightclub insurance specifically related to your employees. In some cases these kinds of insurance should be a part of other kinds of insurance that you carry.

Workers Compensation Insurance

One of the main kinds of Public Liability Insurance for your Bar or Nightclub that you should carry is some form of workers compensation insurance. Many bar and nightclub owners simply miss aspects of this kind of small business insurance when they begin hiring employees. Given the litigiousness of our society however, it is important to that you include workers comp as part of your liability insurance since any slip, brawl or kitchen accident can lead to crippling medical costs for a small bar or nightclub that is uncovered.

In addition, workers compensation insurance is often a necessity for contractors doing work on the premises of your bar or nightclub as well. Many will simply not allow their workers onto your site if you do not provide proof of your policy.

Other Kinds of Insurance Related to Bar or Nightclub Employees

As I mentioned in Liquor Liability Insurance article, making sure to include your employees on your bar and nightclub insurance policy is crucial to your policy since it is fairly common for employees who work at bars and nightclubs to take part in the festivities there as well.

Other areas that employers often forget is in private company vehicles. If you send employees to a site either for catering or picking up supplies and that employee drives the bar van, then it is important that you have your driver covered by your small business insurance policy.

If you operate a very large bar or set of bars (over 50 employees), it will likely be necessary that you also provide them with health insurance. Generally speaking the larger you are the better leverage you have for finding an affordable group policy.

Tip from the Pros: One good way to save on insurance policies is to make sure your employees take part in any programs that your insurance provider may provide in conjunction with their policies. Making sure your employees take part and that you comply with safety measures in your establishment will often qualify your establishment for lower bar and nightclub insurance fees. Be sure to ask your insurance provider about such programs.

Disaster insurance for bars and nightclubs may just seem like an unnecessary frill and indeed, for many bar and nightclub owners it is simply too expense. There is also a great deal of confusion between what is covered by disaster insurance for bars and nightclubs versus what the Commercial Insurance for a Bar or Nightclub or nightclub already carries.

So in this article I will explain what disaster insurance is and what it protects you against and help you get some clarity as to whether and in what quantity you might want to carry disaster insurance (such as hurricane insurance and flood insurance).

Property Insurance versus Disaster Insurance for Bars

So to begin, let us investigate what disaster insurance is and how it is different from your regular bar or nightclub insurance. Disaster insurance basically covers the kinds of property damage that your regular insurance does not cover. For example, your regular commercial insurance for bars and nightclubs will cover damage due to a fire that starts because of undetected electrical problems or damage due to say an automobile crashing through your front window.

It will not, however, usually cover a fire caused by an earthquake or damage from a tornado throwing a car through your front window pane. This is partly what earthquake insurance, hurricane insurance and flood insurance are designed to cover.

Generally, disaster insurance is bought as an add-on to your commercial nightclub insurance.

Business Interruption Insurance

Disaster insurance for bars and nightclubs is not just about restoring property, however. The cost of recovering after a disaster like a flood or earthquake goes beyond just rebuilding and buying equipment. Costs also arise from the interruption to your bar or nightclub. Insurance policies will not generally cover the expenses involved in getting back into business.

For example, if you are out of business for five months while your building is renovated after a flood, how will you retain your key bartender or chef? How do they pay the rent while waiting? And what if you are trying to get your bar or nightclub back up and running more quickly, say in time to take advantage of St. Patrick’s day. Will your insurance cover the expense of getting equipment and installing it in a rush?

Photo of Post Hurricane Katrina bar by Bart Everson (via Flickr)

Business interruption insurance for bars is the kind of insurance that helps you get back up and running and covers your expenses during the time that you are down. Generally speaking, however, being 100% covered will simply be too costly for most bars and nightclubs. That is why most bar and nightclub insurance has to make a determination as to the cost versus benefit of taking on this kind of policy.

Determining Whether Disaster Insurance is for your Bar

Determining whether to include disaster insurance as part of your bar or nightclub insurance will require quite a bit of critical thought. Many factors will play into this including the cost of carrying such insurance. For example, in many coastal areas insurance companies have simply stopped offering disaster insurance because their actuarial analysis has determined it is simply too risky. If you live in a coastal area, you may find that you need to get governmental flood insurance for your bar. Your nightclub insurance policy however, may still be too costly if you live in a high risk area like this.

The additional factor that you will have to determine is the amount of insurance that you need. You may simply conclude that if a disaster occurs you would be willing to simply cash out and start anew somewhere else, in which case you would not need business interruption insurance. However, if you have set down roots in a place and are determined to stay come hell or high water as the apt saying goes, then you will want to consider the cost of business interruption insurance. Generally speaking this kind of disaster insurance costs you about 1/50 of the amount of benefit you would receive. So if you are covered for $50,000/month, it would run you $1000/month to carry it.

Additional Considerations

There are two types of disaster insurance for bars or nightclubs. One kind of disaster insurance covers specific kinds of events. So, for example, hurricane insurance would cover damage from hurricanes but not from say floods. Flood insurance would cover damage from floods but not earthquakes. (Many of these kinds of insurance will also delimit the kind of event as well. For example, your flood insurance may not cover floods caused by hurricane events since that would be covered by hurricane insurance.)

Other kinds of insurance cover all events except those specified in the plan. These kinds of insurance is generally more reliable, though more expensive.

It is always best to know than not to know when it comes to financial matters. (For more on the kinds of insurance you will need, be sure to check out or overview article: Types of Insurance for Bars and Nightclubs.)

It might seem obvious that if you own a drinking establishment like a bar or nightclub, that you should have liquor liability insurance. Despite this, it is estimated that only about one in three bars and nightclubs actually have this vitally important coverage that can literally save their businesses from the kind of legal problems that can sink an average bar without such protections.

There are several reasons why an owner might fail to include liquor liability insurance as part of his or her bar or tavern insurance. The bar owner might, for example, falsely believe that liquor liability insurance is covered in his or her overall bar or nightclub insurance policy even though it is quite common for the Commercial Insurance for a Bar or Nightclub to exclude coverages contained in a liquor liability insurance. Some, of course, either don’t understand what liquor liability insurance covers or may never have realized that such a bar and tavern insurance policy existed.

More often than not, however, the real reason the policy remains neglected is because of the prohibitive cost. It simply costs too much to carry such a policy, so bar owners cross their fingers and hope that through careful training of their employees they can avoid the issues that result from selling liquor.

Such magical thinking, however, will not save owners from their liability requirements.

What is Liquor Liability Insurance?

Liquor liability insurance covers legal problems that may occur from customers legally drinking at your establishment. For example, your bar liquor policy would cover the possible legal problems arising from two or more of your patrons getting into a fight in your establishment if one of them claimed you were responsible because you let them get drunk.

It would also cover you if one of your customers left your bar and got involved in a crash later in the night, should one of the participants in the crash hold you responsible for the customer’s inebriation. It would also cover alcohol poisoning should it occur.

Liquor liability insurance does not cover the illegal sale of alcoholic beverages, such as if you knowingly give alcohol to minors.

In some states in the US, liquor liability insurance is no longer optional. States require it for the legal operation of a bar or nightclub. You should be sure to check with your state to find out if you are in compliance.

How do you find a bar or nightclub insurance policy?

Another problem when it comes to liquor liability insurance is that in many cases a bar or tavern insurance policy will simply be ineffective in actually preventing you from incurring onerous liability requirements. What do I mean?

• Limits to Bar Liquor Policy do not Cover Legal Defense

  One of the tricks many a nightclub insurance policy includes is an exclusion of defense fees from the policy limits. (Or even worse, from the policy itself.) This is a problem because as anyone knows who has ever been sued, often the defense fee will cost you more than the actual damages. If you have to get your own lawyer and pay him or her out of pocket, it might not matter who wins the lawsuit.

  Make sure the liquor liability insurance includes legal defense fees above and beyond the policy limit or make sure you take this into account when considering the value of the policy.

• Assault and Battery Included
  

  Photo Courtesy of CJ Sorg (via Flickr)

  Some really sneaky policies will exclude assault and battery from their liquor liability policy. Your bar or tavern insurance policy is virtually worthless if it doesn’t cover assault and battery charges since this is such a common feature of most lawsuits related to liability claims.

• Employee Liquor Liability Requirements

  Regardless of how unlikely it may seem to you that your employees will get drunk and do something foolish, you want to make sure that employees are covered in your bar liquor policy. Percentages suggest this is a must.

• Mental Damages

  Many policies also try to avoid paying out for mental damages. Given our litigious society it is important that you bar or nightclub insurance policy includes a liability requirements that the insurance company pay for mental damages as well as physical.

Taking Precautions

Of course, having liquor liability insurance doesn’t give you a free ride in terms of alcohol. It is still important to train your staff to recognize inebriated individuals, keep them off your premises and make sure they get home safely if they have already set foot in your establishment.

In addition, your security should be trained to take proactive action with customers who are clearly becoming belligerent.

Many insurers actually have training programs in this regard and will knock down the cost of your liquor liability insurance if you enroll your employees in their problems. It is definitely worth taking advantage of such programs.

Want to find out more about insurance polices for your establishment check out: Types of Insurance for Bars and Nightclubs.

Getting commercial insurance for a bar or nightclub is not something most bar owners feel comfortable doing. The reasons are obvious: commercial insurance for a bar—like virtually all sorts of insurance—is a complicated business, made more complicated by the specialized language in which such insurance policies are written. Trying to compare them can seem like comparing apples and oranges.

What is Bar Insurance?

Your first question about bar insurance may very well be: what is it and how is it different from other types of insurance, like a restaurant insurance policy? Commercial insurance for a bar is the equivalent of home owners insurance for your home. It covers property damage (though not disaster insurance) and usually, in the case of bars, will include types of insurance specific to activities that take place in the bar.

So, for example, although theft insurance may be included as part of a nightclub insurance policy, more likely than not, it will have to be bought separately.

Other considerations for what is and isn’t covered by a bar or nightclub insurance policy include health insurance, Liquor Liability Insurance and Theft Insurance for Bars and Other Employee Related Insurance. A bar owner should ask exactly what is and is not covered in his or her bar or nightclub insurance policy to make sure his or her establishment is properly covered.

Factors Affecting the Cost of Insurance for a Bar

When it comes to bar insurance, however, there are certain factors that will have a huge effect on your policy rates. Sometimes minor changes to the way that you run your bar will make a big change in terms of your bar or nightclub insurance policy. Consider the following, for example:

• How much would it cost to replace everything you own? This is probably the central question you should ask when it comes to determining the size of your bar or restaurant insurance policy. You should consider everything from the cost of the building, to the cost of all the furniture and fixtures on your premises. If the whole thing burnt down, what would it cost you to rebuild and start again?



• Be aware of the difference between “actual cash value” and “replacement cost” in bar and nightclub insurance policies. Actual cash value means the cost of your property at the time of the incident that destroys them. It includes the depreciation due to wear and tear. Replacement cost is the cost that it would actually take to restore your bar or nightclub. So a bar owner should consider this when they are accessing the value of the bar or nightclub insurance.
• Will you have employees? Another crucial question is whether you have employees. If you do, you will probably need workers compensation insurance should one of them be injured. In addition, however, you should be aware that if you have neither worker’s compensation or liability insurance, you may run into a problem should you need to have any construction or redesign work done on your business. Many companies will not allow their workers to work on your property if your insurance does not cover these workers while they are there.
• Will you serve food? And if so, how much: One of the factors that makes a huge difference when it comes to the price of commercial insurance for a bar is the percentage of food that they serve relative to the level of alcoholic beverages. The rule of thumb is that if more than half of your sales are in alcoholic beverages than you are considered a higher liability and will have higher rates. If more than half of your sales are in food, a lower cost restaurant insurance policy might actually work better for your business.

  So if your bar and grill is close to that amount, you may want to consider promoting more sales in food so that you can get safely over that amount. Be careful, however, because you will need to keep careful track and be able to prove your percentages.

• Are you going to have live entertainment at your establishment? You might be surprised to learn that one of the factors which effects your insurance rate is whether you will include private entertainment. Why? If you intend to have pyrotechnics or a foam machine, this will affect your rates. As will a whole series of other entertainment related activities such as swimming pools or dart boards. Be aware of these extra costs to your bar insurance as you plan you bar or nightclub.
• Do you get floods, hurricanes, tornados or earthquakes in your area? Disaster Insurance for Bars and Nightclubs is separate in most cases. In addition, don’t be fooled. Even if you think your establish is likely to survive an earthquake for example, don’t be fooled, a fire caused by an earthquake is technically not covered by the fire insurance a policy may have.

These are just some of the factors that will go into determining what kind of insurance to get and even more crucially, at what level you will get your policy. Be sure to do your research carefully in your area and to double check that you have indeed received the best deal for bar insurance.