Bar and Tavern Insurance Guide: Coverage Types, Cost

Bar and Tavern Insurance Guide: Coverage Types, Cost
March 3, 2020 Levi Olmstead

Most of the time, we don’t give a second thought to insurance. We have it because we have to, but we don’t ever think about using it. Month after month, a withdraw from your bank account pays you premium. We don’t think twice.

What we’ll cover in this guide:

Then the unfortunate happens. Someone trips in your bar, and suddenly you have an injury on your hands. The injured guest is asking for you to pay their hospital bills, and you’re still trying to find out if you’re covered.

Nobody wants to think about the worst-case scenarios, but the truth is, if you haven’t prepared, then you’re facing a serious business issue. Keep reading to see the different types of insurance available to bar owners that can help keep your bar in business.

What Types of Insurance Coverage Do Bars Need?

1. Property Insurance

Any property that you own needs to have insurance coverage. Property insurance will cover the costs of any physical damage that happens to your property. This coverage includes the building of the bar itself. 

The value of your property insurance can be calculated by the actual cash value of the property or by the replacement cost of the property.

Replacement cost insurance can be more expensive, but ff your bar suffers a significant loss like a fire, it might be harder to rebuild with just the actual cash value. For peace of mind, it might be worth it to invest in the replacement cost coverage.

2. General Liability Coverage

Accidents happen every day. There’s always a chance that someone could trip over a chair or slip on a wet floor. When incidents like these happen, general liability coverage will protect you. 

General liability coverage will protect you and your bar if anyone takes a stumble and hurts themselves. In addition to injury protection, you’ll also have protection if any of your products cause a liability. If something you serve causes someone to become sick, your general liability coverage will cover it. 

3. Liquor Liability Coverage

For any business that serves alcohol, liquor liability coverage is a must. 

Everyone knows somebody who’s done something stupid after they’ve been drinking. Try as we might, we can’t stop people from making mistakes.

Liquor liability coverage is a particular type of coverage that will protect you against things that general liability coverage doesn’t. General liability coverage doesn’t apply when the claim is due to sales of an alcoholic beverage. 

Liquor liability coverage costs can vary based on a few different factors. Sales can play a significant role in the price. If your alcohol sales are larger than the sales you receive from the other parts of your business, your costs will be higher. Some states might have different rules for liquor liability coverage that can impact the price as well. 

You may run into a scenario where you’re not sure if an incident should fall under general liability coverage or liquor liability coverage. If you have an insurance plan for both from the same company, they can work it out internally. 

4. Assault & Battery Coverage

Sometimes patrons at bars can get a little rowdy. We like to think that everyone will handle things like adults, but some people aren’t known for their wise decision-making skills when drinking. 

General liability and liquor liability insurance doesn’t exclude assault and battery coverage, but some exclusions might leave you liable. If your general liability and liquor liability coverage include assault and battery claims, you’ll be okay. 

6. Workers’ Compensation Coverage

Nearly all businesses are required to have workers’ compensation coverage. Workers’ compensation coverage protects both the company and the employees in the event of an accident. 

Workers’ compensation will pay money to employees if they injure themselves on the job and require medical attention. These injuries don’t have to be actually at the business, either. If the employees are out of the office but doing business for the company when they’re injured, they’re still covered. 

Workers’ compensation insurance will also protect your business. If you don’t have workman’s compensation coverage, you open yourself up to potential lawsuits from an injured employee. 

7. Additional Coverages

The coverage that you need will depend on the needs of your business. If your business has company cars and does frequent travel, you’ll need auto insurance for all of the vehicles that your company owns. If you brew your beer, there are other insurance coverages available that will protect you from things like spilled product or a tank implosion.

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Determining the Amount of Coverage to Buy

The amount of coverage you need to buy for your bar depends on your business plan. If your bar has a restaurant, you’ll have additional needs to consider.

The same goes for if you brew your beer in-house. Always research what is available – and what you’re required have – for your business.

How Much Does Bar Insurance Cost?

The overall costs for insurance policies will depend on the needs of your business. If you only get the bare minimum, you can expect to pay about $625 a month for the required insurance coverage. If you need additional coverage, this number will increase. Typically, if you pay your premium annually, you can save a few dollars.

Business Owner’s Policy for Bars Cost

Typically, bar owners will pay around $270 per month for their insurance policy. The bar owner’s policy will cover the primary insurance coverages that you need for operations. This bundle will include general liability and property insurance, and when you purchase it them together, you may even get a discount.  

A Bar’s General Liability Cost

The median price that a bar will pay for general liability insurance is roughly $135 per month. Again, you might get a better deal on this if you bundle it with the business owner’s policy. 

A Bar’s Liquor Liability for Bars Cost

Liquor liability coverage will cost you about $170 per month. You’ll be required to carry liquor liability coverage to protect you against any alcohol-related claims. 

A Bar’s Workers’ Compensation Costs

Your worker’s compensation coverage will cost you approximately $185 per month. This cost can vary depending on your state.

Workers’ compensation is non-negotiable. If you have employees, it is a requirement for you to have workers’ compensation coverage to protect you and pay your employees in case of a workplace injury.

Next Steps Insuring Your Bar or Tavern

Don’t be afraid to shop around for different quotes on policies. Insurance professionals are always happy to discuss what needs you might have. Call around, explain your situation, and find what best suits your business.

Start Serving Food in Your Bar – without a Kitchen

Increase time spent in your bar by serving a full food menu to your customers – at no cost.