What are the most prominent insurance risks for bars and pubs?
Bars and pubs generate more claims than most businesses. The fast-paced late-night environment is generally the cause of most claims at a bar or pub. Unfortunately, alcohol-induced violence, stress and criminal conduct are at a higher likelihood than most other businesses outside of the nightlife sector. Pub and bar owners need to be strict and proactive in their risk management, as well as knowledgeable of their licensing and regulatory obligations.
NDML has over 28 years’ experience insuring bars and pubs. Our in-house claims team have handled a wide range of claims over the decades. We have identified that some risks are far more prominent in their likelihood and possible disruption to the business than others.
Below we have listed the most prominent risks impacting bars and pubs. These risks span across all areas of the business, and can be covered by the different aspects of NDML’s Commercial Combined insurance policy.
How to determine the prominence of a risk?
When determining prominence, insurance professionals measure risks by two factors. First is likelihood. Their probability to occur, meaning how often they might happen or how close they are to being realised. Second is Severity. Their impact, deemed by their costliness and disruption were they to occur.
These two degrees of measurement are included within a NDML risk assessment, known as ‘S x L = R’. To help analyse a risk matrix, risk assessment users should indicate the scale of the severity and likelihood, approximating between 1 and 5, as well as provide the context for the risk, such as the location or industry. This ultimately determines the ‘R’, the risk level, ranked as low medium or high.
Efficiently and accurately weighing up risk levels is vital to appropriately handling risks. Proving you have identified risk, understood the likelihood and have done your due diligence, is key for claims defensibility were the worst to happen. Claims defensibility is key to the financial survival of pubs and bars.
The most likely risks at a bar or pub which could result in a claim:
Most common Public Liability Risks for Bars and Pubs:
- Wet floors leading to slips
- Wet stairs leading to falls
- Busy stairwells
- Crowded spaces leading to crushes
- Physical fights leading to injury
- Illicit substance issues
How can public liability risks be managed?
Train staff in best practice and proper procedures, should they witness spillages and broken glass they must know how to act. Incidents need to be recorded in an accident book. Employ security personnel who are experienced and fully certified, or use a recommended security business. Security staff will help to disperse crowds, and be able to identify aggressive, drunk or disorderly patrons, helping to prevent fights before they occur. CCTV coverage which surveils stairwells and halls can help identify bottlenecks and provide excellent defensibility were a claim to arise.
Common Employers’ Liability Risks for Bars and Pubs:
- Wet and greasy floors behind the bar lead to staff injuries
- Manual handling injuries caused by heavy lifting
- Rowdy customers can lead to stress, assault or violence
How can employers’ liability risks be managed?
Businesses have a duty of care to protect their staff, it is a legal obligation. Training staff in best practice is essential, whether that’s for manual handling, safeguarding against burns, or managing spillages behind the bar. Customer de-escalation should also be included in the training, but managers need to have procedures in place to remove disruptive customers from the bar area.
Prominent Buildings and Contents Risks for Bars and Pubs:
- Fire damage due to open flames
- Structural fires due to old equipment
- Plumbing and flood risks
- Speakers damaged
- Theft of equipment
How can pubs and bars manage the most common buildings risks?
Proper training around kitchen equipment is essential, including fire safety awareness. Testing of equipment and facilities should be carried out every six months unless specified. Complex plumbing systems elevate the risk of burst pipes which is why Business Interruption Cover is critical to reduce the financial impact of a temporary closure. Access and security will need a review, CCTV can help defensibility around thefts. Speaker sound volume should be regulated.
Most common licensing and legal expenses risks?
- Noise complaint license suspension
- Alcohol or music licenses revoked
- High turnover exposes venues to wrongful termination claims
- Discrimination and sexual harassment claims
How can pubs and bars handle legal and licensing risks?
Directors and Officers’ insurance with NDML will include Legal Expenses Insurance which covers personal claims against individuals in the business’s leadership. Licensecure with NDML can cover the legal expenses posed by a licensing challenge, and will go someway to reinstating your licenses.
The best advice: Use a Specialist Broker
Bars and pubs can use a specialist broker to arrange their business insurance and protect against the financial repercussions of a claim. At NDML we are passionate about the night-time industry and its importance to British culture. We began 28 years ago as a nightlife and hospitality broker which specifically helped nightlife businesses find the right level of insurance for their needs.
Our insurance specialists have storied experience of working with all types of nightlife venues. We will work with you to understand your club, your team, your processes, and determine the policies your business requires.
Contact us for a non-obligatory quote today.