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NY Business Insurance: Insuring a Bar or Tavern

insuring a barEvery state mandates specific coverages for insuring a bars and taverns in regards to proper operation.  There are a unique set of NY business insurance coverages that need to be addressed when placing insurance for a bar or tavern.

If you own or operate a bar or tavern use this guide to ensure your establishment purchases the proper coverage necessary to maintain operation after an accident.

The Difference Between Insuring a Bar vs Tavern

Bar – sells alcoholic beverages that are consumed on the premises. Many conduct incidental food sales, such as snacks or sandwiches, but the predominant operation is the sale of alcoholic beverages.

Tavern – used to be a place for the traveler to stop, have a meal and possibly secure lodging. Today a tavern primarily sells alcoholic beverages that are consumed on the premises. There may be a full restaurant or just some hot, house specialties.

In the eyes a business insurance carrier the defining difference between insuring a bar and a tavern is going to be relevance of food sales.

Insuring a Bar and Tavern Exposures

Building and Business Property Exposures

The largest exposure to a loss on building or business property is from cooking operations conducted at your bar or tavern. While in the case of bars cooking will likely be limited to microwave and small ovens, taverns may be grills and deep fat fryers. Grills and deep fat fryers are required by New York State law to have automatic fire extinguishing protection, hoods and filters called Ansel Systems.

This may sound obvious but good risk prevention includes keeping your kitchen clean and grease free to prevent fire spread. Fire can be particularly hazardous to large alcoholic beverage stocks which are susceptible to damage from heat and smoke.

A small fire can become a total loss if your local fire department decides to condemn your building due to structural damage of contamination.

Bars and taverns are also seen by many criminals as an attractive target for theft because of the shear volume of people that move freely in and out of the establishment. Liquor should be stored in areas that are inaccessible to customers and accurate stock logs is a necessity.

Business Income Exposures

Business income insurance with extended time period should be a must for any bar or tavern owner. In both bars and taverns the customers and regulars tends to be very loyal.  That being said, a major loss that shuts down your business for an extended period of time can cause those regulars to find a new favorite place to hangout.   A good NY business insurance program for bar and tavern owners most certainly includes business income insurance.

Crime exposures

Running a business which keeps large amounts of cash on hand, as well as liquor can become an attractive target to criminals.  Additionally employee dishonesty can run rampant if proper records aren’t being maintained.

A large liquor stock and the sale of lottery tickets or other gambling devices presents major temptation for employees. Taverns tend to have significant cash sales so cash drawers should be regularly stripped and placed in a safe away from the front of the store. Irregular bank drops during busy evenings can help prevent criminals from finding a weak spot in your defenses.

Closing time is the most vulnerable time so procedures should be in place to prevent holdups. Criminal background checks are recommended for any employee handling money.

Business Liability Exposures

For most bars and taverns the largest exposure to loss is from commercial general liability which covers a range from slips and falls due to the spilled drinks to the personal injury exposure of a bouncer kicking someone out.

Low light, crowded spaces, loud music can all add up to potential injuries for customers…  That doesn’t mean that you shouldn’t provide the environment they enjoy just that securing proper NY business insurance for your bar or tavern is an absolute must.

All fire exits should be plainly visible from any part of the premises. There should be a set procedure for rapid clean-up of spills. Chairs, particularly bar stools, should be regularly checked for cracks and fatigue. Any bouncer activity should be documented and witnessed in case of future lawsuits.

Liquor Liability Exposure 

When it comes to properly protecting your bar or tavern I tend to lean towards the conservative side and say every organization in the business of booze should have a liquor liability policy.  The severity of your unique risk depends on the amount and type of alcohol served and the adherence to strict policies on who can be served and how much they can be served.

Failure to comply with New York State and federal regulations can result in the loss of a liquor permit which will close the business. Liquor liability insurance is not going to help you keep your liquor permit, but it will provide defense and payment in the event something awful happens as a result of you serving alcohol.

A big part of that is putting in place set procedures to check ages of all who enter the establishment. All employees who serve customers must be trained in recognizing signs of intoxication and a procedure should be in place to deny serving intoxicated patrons. Programs that encourage designated drivers or offer free taxi service can be useful.

Workers Compensation Exposures

Where commercial general liability protects your business against accident affecting 3rd parties, NY workers compensation insurance protects against slips, falls, cuts, burns and heavy and awkward lifting, along with interactions with rowdy customers that happen to your employees.

By maintaining a workers comp insurance policy (which is NOT an option in New York State) as part of your NY business insurance program if an employee gets hurt on the job they get the medical coverage necessary and your business is protected from that employee suing you.

The Insurance Takeaway for your Bar or Tavern

It’s simply the nature of business with bars and taverns that accidents are going to happen.  If you plan on keeping your bar or tavern in business for a while it’s important that you purchase and maintain the proper NY business insurance coverages.  That way when an accident does happen you’re not worried about the future of your business.

If you have questions or if you would like to receive a quote for your bar or tavern insurance program give us call at (518) 456-6688 or you can click here to start a quote by email.

Thank you,

Ryan H.