In order to keep your restaurant and bar running smoothly and profitably, you need to take care of it the same way you would treat your customers. Making sure you have the right bar insurance to protect it, just like you would protect your customers, will help make sure that everything goes as smoothly as possible even in the event of unfortunate circumstances. To help give you an idea of what kind of insurance to look into, here are some types of insurance you may want to consider
General Liability
Liability insurance covers bodily injury and property damage sustained by third parties on your premises. A general liability policy will cover claims arising from almost any situation, including slips-and-falls, dog bites, employee errors, customer injuries, or even riots. If a patron falls ill after eating your food, if a trespasser is injured on your property or if someone slips in your lobby—these are all covered under a general liability policy. Be sure to include adequate limits for each claim made against you.
If you use liability as your go-to bar insurance, be sure to include umbrella coverage. An umbrella policy will protect you from a catastrophic claim that could wipe out your business. For example, if someone were injured on your property and incurred $1 million in medical bills—and you had only $500,000 in liability coverage—you’d be on the hook for another $500,000.
Property Damage
This bar insurance covers any damage caused by fire, theft, storm, or other natural disaster. If your restaurant is harmed in a disaster, it could cost you thousands to repair or replace. A good policy limits your risk and pays for repairs or replacements right away so you can get back on your feet quickly. In addition, it should pay for temporary living expenses if you have no income while a permanent fix is made.
Business Income
If you operate your business as a sole proprietorship, an LLC, or a corporation, you can add yourself as an additional insured on your company’s commercial general liability policy. This allows you to recover any profits lost because of injuries related to your business. For example, if someone trips on a chair in your restaurant, breaking his arm and stopping him from working while he recovers, you can recover those losses from your bar insurance company. However, adding yourself as an additional insured also increases your premiums slightly each year.
Workers Compensation
All states require businesses that employ people on-site, whether they are full or part-time, to have workers’ compensation insurance. The coverage pays for medical bills related to a work-related injury or illness. Be sure you know if your state mandates it—and you don’t miss out on qualifying for any discounts by purchasing too late.
Liquor Liability
The average food cost in a restaurant is 20-25% and liquor is 50-60%. If there is an accident with alcohol on your premises, you can be sued by someone who’s injured or their family. You’ll have to pay hospital bills, lost wages, pain & suffering, and mental anguish; all these things add up quickly. Liquor liability insurance covers any legal proceedings that arise from an injury that occurs due to your serving alcoholic beverages at your restaurant or bar.
With this type of bar insurance, you’ll be covered for personal injury claims that occur as a result of your business serving alcohol. If you are sued because someone was injured on your premises due to alcohol intoxication or some other reason related to drinking, then you will be covered by liquor liability insurance. This is an important part of owning a restaurant or bar because it covers all legal expenses if something goes wrong with alcohol on your premises. It’s better to be safe than sorry when it comes to serving alcohol in your restaurant or bar.
Loss Control
Business owners need to protect their employees, patrons, property, and bottom-line against losses. Of course, not all insurance is created equal.
Consider starting with a general liability policy—it covers bodily injury or property damage that occurs on your premises or as a result of your business operations. With liability insurance, you also can protect yourself from potentially devastating lawsuits that can cost tens of thousands in legal fees just to get started.
Employment Practices Liability
It protects businesses from claims arising from job discrimination, wrongful termination, harassment, or other employment-related issues.
Employment practices liability insurance protects you if a former employee brings suit against your business because he or she was fired or not hired due to: age; race; national origin; gender identity; sexual orientation; political affiliation; disability; or marital status. This coverage is often included as part of an EPLI policy. Employees are most likely to sue their employers over wrongful termination, harassment, and wrongful discipline.
Umbrella Liability
An umbrella policy provides additional coverage for damages that occur outside your normal business operations. This includes slip-and-fall lawsuits, which have become more common as a result of people trying to save money on personal injury protection (aka car insurance). As such, it’s especially important for restaurants and bars that have events like yoga classes or art installations.
Most types of bar insurance will cover losses resulting from slips, trips, falls, and even broken glass. However, these policies will not cover any injuries you cause yourself or your employees. For example, if you accidentally break a bottle of wine over your foot in front of customers, it’s unlikely that your business liability policy will help pay for medical bills. That’s why it’s important to have an umbrella policy in place as well.
Cyber Liability
Cyber attacks are growing in number every year, with a resulting rise in both customer identity theft and credit card fraud. Hackers have also recently taken over some very high-profile companies’ Twitter accounts.
As a business owner, you could be held responsible for lost funds if a cyber attack occurs on your restaurant or bar’s website. Consider investing in cyber liability insurance to protect your business against these attacks.
Final Thoughts
Being a restaurant or bar owner means you have a lot on your plate. It’s important to not only understand what types of insurance are necessary for your business, but also that you keep up with paying for them. It’s also essential that you know what type of coverage you need as every business is different.
