Canada has about 5,200 bars — that’s 1.5 bars for every 10,000 Canadians.
As the proud owner of one of these establishments, you pride yourself on offering a safe but enjoyable experience for your guests. You give a lot of thought to your branding and you offer terrific drink specials to entice new customers to “belly up” to your bar.
But when it comes to discussing bar insurance, you might not feel as enthusiastic. You know there are certain insurance coverages needed by a bar, but you’re not exactly sure how it works.
We’re here to take the mystery out of bar and tavern insurance. Keep reading below to learn the specifics of buying business insurance for your bar.
Is Buying Business Insurance Really Necessary?
When you bought the building or signed the lease, you needed general liability insurance to officially open your bar. This is a necessary first step, but is it enough on its own?
The short answer is: No, it’s not.
General liability insurance will protect your business if someone gets injured on your premises. But consider some other things that could happen at your bar:
- Someone could drink too much and start a fight
- Someone could (intentionally or unintentionally) damage your bar property
- Someone could get into a car accident after leaving your bar
- Someone could break in and steal equipment from the kitchen
- You could fall victim to cybercrime that causes a costly data breach
- You could experience property damage from a fire, storm, or another disaster
- You could temporarily have to close your bar due to unforeseen circumstances
In each of these circumstances, your general liability insurance won’t provide the coverage you need. This is why it’s essential to speak with an insurance broker who can advise you on the specific risks associated with owning a bar.
Insurance Coverages Needed by a Bar
With this overview in mind, let’s consider the different types of insurance your bar may need.
1. General Liability
We’ve already touched on it, but let’s define this essential type of business insurance.
General liability coverage protects you and your business if anyone falls or injures themselves on the premises. It will also protect you if something you serve causes one of your customers to become sick.
2. Liquor Liability
Perhaps the one thing that sets bars apart from other businesses is the sale and consumption of alcohol.
Although most of your patrons are likely responsible individuals, anything can happen when alcohol gets involved. Harmful drinking is a growing problem in Canada. In fact, more people are hospitalized each year due to alcohol than heart attacks!
As a bar owner, you (and your staff) are responsible for keeping your customers safe. Despite your best efforts, though, someone could still have too much to drink. They may even show up at your bar already intoxicated.
Any number of things can go wrong, from a slip-and-fall to a fight with other customers. There’s always the possibility that they’ll drink too much, get behind the wheel, and get into an accident, injuring themselves or someone else.
Liquor liability coverage is essential for all bars, taverns, and restaurants that serve alcohol. This protects you against injuries or property damage caused by a drunk or unruly patron. It even protects you after they leave your establishment, just in case there’s an alcohol-related crash on their way home.
3. Commercial Property Coverage
If you lease your building, the property owner will carry general property insurance that covers the physical building.
However, it’s up to you to get coverage for everything related to your business. This includes your furniture, signage, kitchen equipment, and office equipment.
Commercial property coverage will pay to repair or replace these things in the event of damage.
4. Equipment Breakdown Coverage
Bar owners usually have some pricey equipment laying around. Think about your walk-in fridge, freezers, coolers, or frozen drink machines. If you serve food, you also have your grills, fryers, and kitchen equipment to consider.
What happens if one of these essential items breaks down and stops working? This insurance will pay for the damages caused by the equipment breakdown and results.
5. Crime Coverage
Even with the best security systems in place, crime is always a possibility. Someone could rob your bar in the middle of the day or vandalize it in the middle of the night. You could even have the misfortune of an employee who steals money, products, or equipment from you.
Don’t make the mistake of thinking it couldn’t happen to your business. Crime insurance will protect you if such a tragedy befalls you.
6. Employment Practices Liability
Customers aren’t the only risk to your business. With so many headlines about discrimination and sexual harassment, you need to consider potential risks from your employees too.
Employment practices liability provides coverage against allegations of discrimination and harassment. It can also protect you from lawsuits dealing with wrongful termination, wage issues, or breach of contract.
Understanding Bar Insurance Costs
With all these different types of coverage, how much can you expect to pay for your bar insurance?
There’s no fixed price for any of these insurance policies. To understand your specific costs, you’ll need to provide information such as:
- The square footage of your bar
- The age and type of building
- The value of your equipment and inventory
- Security systems and fire systems on the premises
- The average number of customers you serve
- The average number of employees on staff
- Your projected sales figures
With these details, your insurance broker will create a custom quote that’s unique to your business. It will include all the protection you need while ensuring you don’t pay for coverage you don’t need.
James Inwood: Your Bar Insurance Provider
Every type of business carries some degree of risk, and bars are no exception. In fact, with alcohol in the mix, bars and taverns require some unique types of insurance.
We understand that buying business insurance can be confusing or even frustrating. Our goal is to make it as easy as possible for you to get the coverage you need at a price you can afford.
James Inwood and the Canadian Insurance Brokers Inc. team specialize in helping small business owners like you. Contact us today to discuss your business needs and receive a free insurance quote. If you prefer to speak with a human, call our office anytime at 647-966-7093.
James Inwood is a member of Canadian Insurance Brokers Inc. CIBI operates across Canada with more than 40 licensed brokers and is completely independent so our advice is always objective. Representing 14 insurance carriers on the personal side and over 20 insurance providers on the commercial side helps give my clients clear choice and competitive pricing.