Whether you own a bar or plan to open one, you must understand the different types of insurance for bars. Bars face various risks, from customers and employees getting injured on the premises to property loss due to theft or equipment malfunction.
Having adequate insurance can protect you from financial ruin if these risks become a reality. Here are seven different types of bar insurance:
General Liability
Many states require bar owners to obtain general liability insurance to cover property damages and injuries that may occur during business operations.
A patron may slip and fall due to a spilled drink, sustaining injuries. Your employee may spill drinks on a customer, damaging their clothing or electronic devices. You may falsely advertise a product or service, leading to customer dissatisfaction.
These situations and others may lead to a lawsuit, and your general liability insurance can cover the relevant damages. It can cater to medical expenses, legal defense costs, and settlement or lawsuit judgments.
Liquor Liability
Some states require bar owners to get liquor liability insurance, also popularly known as dram shop insurance. It protects these establishments in cases involving customers purchasing and consuming alcoholic beverages that cause injury or damage to themselves or others.
A patron may become intoxicated and get in an accident after leaving your bar, or they might hurt someone else while under the influence.
Your liquor liability insurance for bars can cover any associated damages and legal expenses. You may add assault and battery liability to this coverage to protect yourself if a fight occurs on the premises.
Property Coverage
Property insurance covers your bar from any loss or damage to physical assets, including the building, equipment, inventory, and furniture. A fire may ravage the bar and cause severe damage to these assets, or someone may vandalize the building or steal essential equipment.
An equipment malfunction may also lead to inventory damage. Property insurance can cover these situations, reimbursing you for any losses or damages.
The best thing about property insurance for bars is that it can be customized. You can only cover one risk you’re most prone to or several different risks.
Workers’ Compensation
Depending on your bar’s size, several employees may be working in different roles. They may get injured on the job due to slips, falls, burns, cuts, and other accidents. Workers’ compensation insurance can cover these injuries, providing medical benefits and replacing lost wages for an employee’s recovery period.
If the employee dies in a work-related accident, their dependents can receive death benefits. In most states, employers must purchase workers’ compensation insurance to cover their employees against job-related injuries.
Business Interruption Insurance
There may be times when you have to close your business temporarily due to an unexpected event. It could be a natural disaster, such as a hurricane, or an equipment malfunction that forces you to shut down the bar for several days.
If a covered event occurs, your business interruption insurance for bars can cover any lost income from these unforeseen situations.
Depending on the specifics of the coverage, it may cater to the revenue you’d make if your bar were open, salaries for employees, taxes, rent, loan payments, temporary relocation costs, and other aspects. Talk to your insurer to determine what the policy covers.
Employment Practices Liability Insurance
A current or former employee may file a lawsuit against your bar. It could be for discrimination, wrongful termination, sexual harassment, or other unfair labor practices. They may also sue you for failing to provide a safe and compliant work environment.
Employment practices liability insurance (EPLI) can cover these legal expenses, including settlements, court costs, defense fees, and other associated damages. If you’re not insured, you’ll have to pay for these costs out of pocket, which can be financially damaging.
Cyber Liability Insurance
Many bars use computers, smartphones, and other electronic devices to process payments, store customer information, or manage employee data. You may be vulnerable to a cyber attack resulting in stolen data.
Your cyber liability insurance can cover the relevant losses if a customer sues you for a data breach or other cybersecurity issues. It may reimburse you for any fines or penalties imposed by regulatory authorities for a cybersecurity violation.
Invest in the Right Insurance for Bars
These are some of the insurance policies bars must consider. They can help protect your business from financial ruin if an unexpected event occurs, allowing you to recover quicker and continue operations.
Talk to an experienced insurance provider or agent to determine the right coverage for your bar. They can assess the risks you’re most prone to and recommend the most suitable policies.
