Bar insurance in 2023. A complete guide.
As a bar owner, you will have invested a vast amount of money and time into your establishment. Further, your bar's success relies on your local reputation and ability to care for your customers.
Without the right bar insurance, you could lose your hard-earned money and reputation in a single accident. To avoid that scenario, you should ensure you are adequately protected.
Bar insurance (also known as tavern insurance) is a type of commercial insurance designed to meet the unique needs of bars, taverns, and pubs.
Overall, bar insurance will help protect you from many potential risks you face daily on the job.
Most bar policies are package policies that combine numerous individual coverages into a single policy, but it is possible to buy each coverage separately.
This guide will outline what coverages are included in bar insurance and what you need to consider when buying coverage for your establishment.
Table of contents
- Do I need bar insurance?
- Who needs bar insurance?
- What types of insurance do bars need?
- Additional bar insurance coverage
- Common bar insurance claim scenarios
- Bar insurance FAQ
- Bar insurance cost
Do I need bar insurance?
In short, it’s advisable to have bar insurance. You face daily risks on the job. What’s more, it’s always a smart move to be prepared for possible setbacks in life - that goes for business too.
Bar insurance helps you to maintain the smooth running of your business, and in some cases, it's a legal requirement.
If you employ any staff (other than immediate family members), you must have employer liability insurance.
At a minimum, you should also consider public liability insurance to protect your establishment. Public and product liability insurance is an essential cover for bars and pubs.
Who needs bar insurance?
Bars and similar establishments, such as taverns and pubs, should consider getting bar insurance.
Most coverages that bar policies include can sometimes be purchased separately, but you can buy them through a tailor-made package policy. This option is typically more straightforward and affordable.
Liability insurance for bars is specifically tailored to protect you from claims due to injuries, illnesses, or property damages if your business is at fault.
In addition to public liability, you should consider protecting your stock, decor, and specialist equipment.
Whether you've experienced a theft overnight or an accident in the kitchen during working hours, any disruption to your business can be a huge financial setback. Bar insurance will cover you for such cases.
What types of insurance do bars need?
The following insurance policies cover the most common risks of running a bar.
Public liability insurance
A public liability policy covers common risks, including customer injuries, customer property damage, and advertising injuries.
Public liability insurance can shield you from expensive claims, from faulty bar stools on your premises to damages caused by your business.
Public liability insurance covers:
- Slip-and-fall accidents on your business premises
- Illnesses caused by your business activities or products
- Damaged customer property when your business is at fault
Business owner’s policy
A Business owner’s policy (or BOP) typically includes three essential coverage types, which is cheaper than buying them separately.
- Liability protection
- Property insurance
- Business interruption insurance
In addition to the business owner's policy, you can add customized coverage.
Business owner’s policy covers:
- Third-party injuries
- Damages to business property
- Power outages that cause spoilage
Workers’ compensation insurance
For bars that have employees, this is often required. Workers’ compensation insurance protects sole proprietors from work-related costs that health insurance might deny.
Workers’ compensation insurance covers:
- Legal expenses
- Any missed wages
- Employee medical fees
Employer’s liability insurance
This coverage will protect you if anyone gets sick or injured while working for your pub.
Employers' liability insurance can protect you from financial losses ranging from faulty kitchen equipment to catching the flu while working.
Employer’s liability insurance covers:
- Injuries and illnesses resulting from working for you (for all staff: permanent staff, temporary staff, and casual workers).
Employers' liability is a legal requirement if you have employees. Without this coverage, you could be fined thousands per day for each employee.
Commercial auto insurance
This is a requirement if you have commercial auto insurance. This policy will cover medical bills and property damage if your work vehicle is involved in an accident.
Commercial auto insurance covers:
- Injuries caused to a third party
- Vehicle vandalism and other damages
- Property damage caused by your work vehicle
Additional bar insurance coverage
In addition to the above types of insurance, you might want to consider the following policies.
This insurance will protect you if something unfortunate happens to your stock of ingredients, from spoiled food to expired drinks.
Whatever the issue is related to your stock, stock insurance protects you from costly claims and legal matters.
Stock insurance covers:
- Damaged, contaminated, spoiled, and unusable ingredients
- The loss or theft of stock such as drinks, food, and branded goods
Legal expenses insurance
This insurance will cover any legal expenses you need in the event of a claim. Legal expenses insurance can protect you from out-of-pocket fees, whether it’s used for representation in court or compensation payouts.
Legal expenses insurance covers:
- Legal fees that are attributed to your business
- Compensation payouts associated with trespass and property damage
- The fees to resolve tax issues, from investigations to compliance disputes
Business interruption insurance
This insurance type can help cover loss of income if you have to close your bar due to unforeseen circumstances.
Business interruption insurance will ensure you are compensated if you cannot trade as normal.
Business interruption insurance covers:
- Lost income if you cannot trade due to damaged and stolen stock, contents, or buildings
Personal accident insurance
This coverage protects anyone who is covered by the policy for accidental injuries off-duty or at work.
Personal accident insurance can cover expenses, whether you have to pay for someone’s medical expenses or for lost income.
Personal accident insurance covers:
- Lost income, medical costs, and hospitalization
- Accidental injury or death, inside or outside of work, for anyone covered by the policy
Other insurance types to consider
Cyber liability insurance
This insurance will protect you if you experience a cyber attack, such as a data breach or cyber extortion.
Cyber liability insurance helps cover expenses for data recovery, investigative services, lost income, and lawsuits due to privacy breaches.
Employment practices liability insurance
This specialized coverage will protect your bar from employment-related claims for cases including discrimination, harassment, and wrongful termination.
Note: Employment practices liability insurance is different from employer's liability insurance.
Common bar insurance claim scenarios
One of your customers accidentally trips over a chair leg and is injured while exiting your establishment. They suffer a broken leg and other minor injuries and decide to sue your pub for damages.
Your commercial public liability insurance could help you pay for your customer’s medical fees and your pub’s legal representation and defense expenses.
A customer over the limit drives home from your establishment, and they get into a car accident on the way there, causing property damage to a private residence.
You knew they had consumed too much alcohol, and their level of intoxication was a factor in the accident. Your customer sued your bar for negligence.
Your public liability insurance may also cover you in this scenario, and you could use “liquor liability insurance” in this circumstance. Those coverages can cover your legal defense expenses and the customer’s medical costs.
Your bar’s private software system is jeopardized and hacked. As a result, the database of your customer’s personal and financial data is stolen in one day.
Your cyber liability insurance can help you cover the costs associated with the incident. The fees you face might include notifying your customers of the situation and repairing your computing systems, plus any legal fees you need to cover.
Bar insurance FAQ
Here are the answers to some frequently asked questions about bar insurance.
What establishments need bar insurance?
Similar establishments to bars should consider getting bar insurance, such as taverns, restaurants, and pubs.
Nightclubs and restaurants that serve alcohol could use some of the protection offered by bar policies. However, they might get a better offer with a specific policy tailored to their industry.
Does bar insurance include workers' compensation?
Most bar insurance does not include workers' compensation insurance and typically doesn’t provide health or disability insurance either, so these should be purchased separately.
Establishments that need additional insurance policies, such as workers' compensation, typically purchase them as stand-alone policies.
How much coverage do bars require?
The amount of insurance your bar requires depends on your business type and particular needs.
When tailoring a bar insurance plan, you should consider all of the risks involved with running your business.
Consider issues ranging from customer-related sickness from food or drinks, alcohol-related accidents, property damage, equipment breakages, and theft or vandalism.
Bar insurance cost
The cost of bar insurance varies depending on your business and level of risk. For example, a small bar with a few workers will have a cheaper policy than a large tavern.
If you have any questions about the cost, an experienced insurance agent will be able to help you.
The factors that affect bar insurance costs include:
- Your bar location and size
- The value of your property
- Business equipment
- Services offered, such as dining
- Annual business revenue
- Number of staff members
- Average number of customers
- Types of insurance required
- The policy limits and deductibles
If you would like to find cheap bar insurance, it's best to shop around.
Applying for free quotes will ensure you find the best deal that’s right for you.
From this point, you can then pick and choose what goes into your policy, so you only pay for what you will use.
Bar insurance quote
Managing a bar is full-on work, so we’re here to help you keep the insurance part simple.
Whether you run one small bar or own a chain of bars, our team of insurance experts can help you take out a simple and understandable policy.
With 35 years of experience, Pitsas Insurances can help you to make optimal decisions according to your budget and specific needs.
Business insurance USA
For companies registered in the USA, you can receive quotations from Progressive Commercial.
Business insurance UK
For companies registered in Britain, you can receive quotations from Simply Business.
Business insurance Cyprus
For companies registered in Cyprus, you can receive a quotation from Pitsas Insurances by completing the quotation.
If you have any questions, contact our insurance experts and work with a licensed agent. We can help you find the right bar insurance and offer a fast turnaround.
To find out more about how our team of insurance experts can help you, see here.