What type of insurance do I need for my Nightclub or Bar?

As a nightclub or bar owner, you face numerous risk exposures that could lead to a financial loss for your business. The right insurance policies can help protect your nightclub or bar from financial ruin in the event of a claim. This is where Nightclub & Bar Insurance comes in.

What is Nightclub & Bar Insurance?

Nightclub & Bar Insurance falls under the category of business insurance, however it factors in the unique risks faced by those operating businesses in the alcohol service and gambling industries, and designs a package to encompass those risk exposures.

How Nightclub & Bar Insurance can help you

If you’re employing staff, working out of a premises, running equipment, and serving drinks and food to the public, you’re exposed to a range of risks. If you aren’t covered in circumstances when something goes wrong, you may have significant expenses to pay, or experience loss of income, and this all may jeopardise your business.

An insurance broker specialising in Bars & Nightclubs Insurance can make a full assessment of the potential risks you’re exposed to, based on their knowledge of events that have occurred within the industry in the past. As part of an overall insurance package, they will draw together policies to cover you if something goes wrong.

Insurers will consider a number of factors in their assessment. Questions asked of nightclubs and bars relate to common exposures like liability incidents, and commercial property related claims. These include:

• What is the age of the premises your business operates out of, how was the building constructed, and where are the premises located?

• Is there appropriate lighting in the premises, to reduce the likelihood of slips and falls?

• Are there proper measures in place to cordon off and clean up spills?

• Electrical equipment –

• Are electrical switchboards regularly checked and maintained?
• Is electrical equipment well-maintained? (Equipment kept clean, tested and tagged?)
• What sort of refrigeration equipment is used, and could it be a fire risk?
• Are deep fryers used, and if so, do they have a mechanical or electronic temperature control? Are cooking flue systems cleaned by a qualified external cleaner? How often?

 
• What fire prevention measures are in place? Are extinguishers serviced?

• If serving food to patrons, are appropriate food safety measures in place?

• Are security staff trained? Do you have measures in place if assaults occur between patrons or between patrons and staff?
• Do you have security systems in place (CCTV etc.)?

• Do you have Business Continuity Plans in place for circumstances where there is mechanical breakdown?

• Have you prepared for the possibility that your business may need to close for periods of time, due to a claim or other unexpected circumstance?

The types of Insurance policies that fall under the umbrella of Nightclub & Bar Insurance include the following:

1. Public Liability Insurance

2. Product Liability Insurance

3. Property Insurance

4. Business Interruption Insurance

5. Workers’ Compensation Insurance

Note, this list is not exhaustive, and other forms of insurance may apply, depending on your business and other circumstances.

Here is a brief explanation of each type of insurance and what it may cover you for.

Public Liability Insurance

Public Liability insurance can be an instrumental asset for bars and restaurants that serve alcohol. It covers you if you are liable to pay claims arising from personal injury or property damage caused by your actions, or those of your staff, during the operation of the company’s premises, vehicles and equipment.

Damages paid in public liability claims are intended to cover expenses like medical bills due to bodily injury (from falls, assaults, food poisoning and so on), and for lost income during recovery, plus legal fees.

Product Liability Insurance

This form of insurance is there to protect you from any damages or injuries that occur as a result of the products you sell.

Product Liability Insurance is a necessary insurance for any business that sells products to the public, for example food and alcohol products. It guards against financial loss in the event of a product defect that causes physical injury, property damage, or other losses derived from the use of your product.

Examples:

• You serve food to customers that results in a food poisoning incident.

• A foreign object lands in a drink and a customer drinks it, resulting in an injury.

• A staff member serves alcohol to an intoxicated patron, and the patron falls, resulting in an injury.

Product liability insurance helps protect you from significant legal fees, court costs, and even compensation when litigants are successful in their lawsuits.

Property Insurance

If you own or lease out property to a nightclub or bar business, you need Property Insurance. Property Insurance protects you from financial losses caused by unexpected events, like fires, storms, theft, and lawsuits. The right property insurance policy can protect you from risks like property damage, liability claims, and loss of income.

Property insurance can also cover repair and replacement of damaged property, temporary relocation, and income lost due to a business closure due to a covered event.

When talking about damage to property, the property insurance may cover damage to patron property or to property of the business leasing the building.

Examples:

Patron property damage: a switchboard fire races through your building, causing patrons to flee. Their personal belongings are damaged in the fire and they make a claim to have them replaced.

Business property damage: you experience a roof leak which damages audio equipment owned by the nightclub renting your space. The business lodges a claim.

Property Insurance will help you to pay out the costs of repairing or replacing these patron or business assets.

Business Interruption Insurance

Business interruption insurance is an important type of coverage to have in place, as it can provide valuable financial assistance should your business be forced to close due to an accident or natural disaster. Business Interruption Insurance can help to cover the costs associated with lost income, pay staff salaries, pay the rent on your premises, and offset other unavoidable expenses while businesses take time to get back on their feet. Investing in business interruption insurance can help mitigate some of the risks your business may face is such incidents occur, and could be essential for maintaining security and profitability.

Workers’ Compensation Insurance

Workers’ Compensation Insurance is an important investment for any nightclub or bar owner, and under Australian law, it’s compulsory for employers to take out this insurance. Workers compensation covers workers in case they become sick or injured because of work, and includes payments to employees to cover their wages while they’re not fit for work, medical expenses and rehabilitation.

Having Workers’ Compensation Insurance also serves to promote workplace safety by holding employers accountable for creating safe environments for their employees. All in all, it is a cost-effective way to protect both you as an employer and your workforce.

Steadfast Eastern Insurance Brokers – Nightclub & Bar Insurance

We understand the challenges those operating a nightclub or bar face, and know that simple Business Insurance won’t cover the full scope of these unique exposures. When we look at matching you with the right insurance policies, we take a wide-ranging view to identify potential exposures, and ensure we create a package of insurance policies that guard you against potential business damage.

Contact us today and we can match you with the right insurance policies for you.