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.
- 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.
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