Figuring out what insurance you need can be quite a painful and confusing process. But, having the proper insurance is an essential part of opening a business—especially one that serves food and alcohol. Here’s a quick rundown of the common types of insurance you’ll need for your bar or restaurant.
General liability protects you and your business from suits from third parties (vendors, patrons, etc.) for injuries sustained or damages incurred on your property. In your case, think someone slipping on a floor, falling off a chair, or getting sick after eating or drinking at your establishment.
When setting up your general liability insurance, make sure to ask how your unique features will change the cost and type of coverage you need. Do you have a pool table or any kind of games? Does your bar or restaurant host the occasional band or offer karaoke? Are you pet friendly? That all affects your coverage.
It’s inevitable; stuff breaks. Angry patrons will shatter the occasional stool. Pipes will burst. We briefly touched upon this in our disaster recovery blog post, but property insurance can help you recover and repair any kind of damage to your building or equipment—and sometimes save an establishment from going under entirely.
There are many categories of property insurance. At the very least, you’ll need to catalogue the model numbers of all your equipment and the values of everything in your establishment. If you know the exact value of what you’re insuring, you can decide if you want insurance that covers replacement of your items, or simply the monetary value of them.
It’s almost a near certainty you will need a Workers’ Compensation Policy. Like property damage, “employee damage” can happen despite your best efforts. Workers’ Compensation will cover anything from medical bills and disability payments, to rehab and prescription drug coverage. Providing a safe work space is a given, of course, but the monetary reminder doesn’t hurt.
Check your state’s worker compensation laws and identify what kind of policy you need. Certain states prohibit private insurance for workers’ comp, while others use an independent board to classify which kind of policy your business qualifies for.
Separate from general liability, liquor liability concerns damages and events that occur because of drunkenness, or any incidents arising from the use of alcohol. Believe it or not, if a patron of your bar gets into a car accident on the way home, or starts a fight, or even gets removed by a bouncer, your establishment could be the target of both a civil and criminal suit. A liquor liability policy, which is a lawful requirement in most states, protects you and helps cover anything from awarded damages to legal fees.
These four examples are the basic types of insurance needed to protect your bar or restaurant. Consult with your policy provider about any other types of insurance your specific business may need, such as flood or fire insurance.
Not everyone needs or can afford every type of insurance, but if you know how much you plan on insuring, you can find a policy that fits your needs and your price range.