New Year, New Risks

2020 is almost upon us and, though we don’t quite have 20:20 vision, we thought you’d like to hear our predictions for the year ahead…

What are the biggest risks late night leisure venues will need to look out for in the New Year?

We expect to see similar claims coming through in 2020. Slips and trips are likely to happen at any time of the year, whether due to spilt mojitos at a summer party or a layer of winter frost on a footpath. Public liability claims and employers’ liability claims will always be high on our list of claims as guests and employees suffer accidents throughout the year.

And, of course, there are buildings and contents claims for any damage caused to venues. Business Interruption cover often goes hand-in-hand with this, if businesses need to shut for a significant period of time to restore and repair the building.

The industry is changing and evolving. There’s an industry-wide call for stronger security, more unusual experiences for customers and improved workplace wellbeing for hospitality staff. But these key industry changes will eventually have a knock-on impact on insurance:

  • Investing in security could help to mitigate risks and reduce the likelihood of you needing to make a claim. For example, CCTV cameras act as a strong deterrent against theft, fraud and violence.
  • As customers seek bigger and better experiences, venues are likely to begin hosting one-off events and live experienced to meet demand. These additional events pose different risks, and therefore might not be included as standard within your insurance policy.
  • Dissatisfied and disengaged employees are more likely to make mistakes, cause damage to your business or expose your business to external threats. Prioritising workplace wellbeing and looking after team members at every level could not only make your employees happier, but it could be a great business decision. 

Are there any new risks or additional types of cover venues should investigate?

The nature of both cyber-attacks and terrorism are changing.

No longer are hackers just targeting big corporations and organisations. They are targeting businesses with weaker online security, or companies who might act as an entry point to valuable data. In fact, according to Verizon, 43% of cyber-attacks target small businesses. The Federation of Small Businesses reckons small businesses are subject to almost 10,000 cyber-attacks a day, though other studies estimate a staggering 65,000 attempted cyber-attacks every single day. The cost of these attacks can be significant – £1,300 is the average cost of an individual attack. Whether attackers want to steal, destroy or hold your data ransom it’s important to know how cyber crime could impact your venue (even if you think it won’t affect you). Having relevant cyber cover and taking risk management advice is imperative as we enter yet another year of technology growing and evolving.

Terrorism insurance should also be considered for all SMEs, including businesses within the night-time industry. Terrorists are increasingly targeting small businesses and areas attracting a large volume of people. Even if a business isn’t physically damaged by an attack, business disruption or loss of revenue could have a negative financial impact. It’s worth considering adding terrorism cover to your policy to make sure your business won’t suffer the consequences of an attack. Though unlikely, with the country’s threat level set as “substantial”, an attack is still considered a possibility.

Will Brexit impact insurance premiums?

If Britain does leave the EU next year, there will be some significant changes. The UK insurance market won’t be bound by EU laws, so theoretically insurance rules and regulations could change. This could eventually affect premiums if the new rules deem a certain quality or feature a different risk that previously couldn’t be differentiated under EU laws. It’s unlikely any changes will impact premiums for a good few years, though.

Brexit’s biggest impact on the insurance industry could be the UK losing ‘passporting’ rights to insure European businesses. This could lead to the loss of ability to deal with EU clients, and potential increased business costs when it comes to working with countries outside of Great Britain. If you operate venues outside of the UK, this could impact the relationship with your insurer.

Whatever happens, those with EU-based insurers will continue to have their claims paid while a permanent arrangement is put in place. Most UK insurance companies have moved European business to EU countries to ensure compliance.

How will night-time industry insurance be affected next year?

Every venue’s policy is different, though we don’t expect a rise in premiums or excess in any specific area of insurance. Obviously if you made a substantial claim this year then it’s likely your insurance will have a slight increase but this will be assessed on a case-by-case basis by your insurer. Having a broker on hand to help and defend you can help bring your premium down.

What additional cover should I consider?

Each night-time venue is entirely different. For example, a hotel will present very different risks when compared to a restaurant or nightclub. Never look for a ‘one size fits all’ policy as it won’t be tailored to your needs and might not adequately cover you for all the what ifs your business faces. NDML are specialists in the industry and know the specific cover to look out for.  

We advise venue owners and managers to consider Cyber Insurance to protect your venue should an attack happen. Stats show 43% of cyber attacks target small businesses, with 60% of those businesses failing within six months of an attack. Attackers are looking for sensitive data, such as customer records or financial information. And there are often few ways to prevent an attack, with 48% of data breaches caused by a negligent employee or contractor. The best way to protect your business from experiencing huge financial ramifications is to choose Cyber Insurance, which will pay out to cover you against any attack.

Terrorism cover is also worth considering. You might not be the specific target of an attack, but terrorism could still impact your business. If an area is cordoned off for an extended period of time or you lose revenue due to less footfall to an area in the aftermath of an attack your business could be significantly impacted. Comprehensive Terrorism insurance will give you peace of mind that, should an attack affect you, your business will be safe in the long-term.

Directors and Officers should also consider Management Liability cover. Business owners and senior management can have personal claims made against them. And these claims might not be covered under the business’s liability insurance. This type of insurance protects the finances of the company and the personal wealth of its directors.  

Get ready for next year with a confidential insurance review

You don’t have to jump ship straight away. If you’re prepping for insurance renewal and need some free advice on whether your current insurance is offering adequate protection, you’ve come to the right place. NDML offers a free confidential review to help you make an informed decision.