When trying to insure your bar, tavern or any other place that sells alcohol, the most important thing is to plan everything ahead. By selling alcohol to the public your business automatically engages in a higher degree of risk that has to be assessed right from the start.
So when you're looking for a way to manage the risks that your bar or tavern will face during operation you have to ask some questions first:
What is the approximate value of your bar, including the property, fixtures and contents?
The best way to evaluate these costs is to consider the value of replacing your entire bar, including the equipment, coolers, the décor, stock, property, building and all other things if your business would get destroyed overnight.
What part of the business turnover will the alcohol take?
The insurance company will certainly require you to provide reports of your sales. In overall, if the alcohol takes about 50% of your overall turnover or more, the cost of insuring your business will be more expensive. So make sure you know the exact percentage of alcohol sales in your bar.
Will you feature any recreational activities at your bar?
Featuring certain recreational activities may give you a hard time getting your bar insured with some companies, and if you will still manage to find a policy, the rates will be higher. Insurance companies assess recreational features such as dance poles, trampolines, pyrotechnics, rock walls, swimming pools and any other distractions as quite risky features that will raise the likelihood of an insurance claim.
Will you hire someone else?
If your bar will feature additional workers besides you, you will certainly require workers' compensation insurance with your small business insurance policy, and it maybe even important to get group health insurance as well.
Does you state have special dram shop liability laws?
Laws can differ significantly from one state to another, and this also concerns the liability to a third party in case of injuries inflicted by a drunken person at your bar. So it is highly recommended to study the local framework before you actually purchase and y specific coverage regarding this type of liability.
Will your business have a vehicle?
In case your bar or restaurant will have its own vehicle used for stock delivery or other business purposes then you will have to buy commercial auto insurance for this vehicle as well, otherwise it won't be covered by a standard auto insurance policy. Using your personal transport for these purposes is not forbidden but you risk being denied of coverage in case of an accident.
Is your bar located in a risky area?
If your business is located in an area that is prone to natural calamities you have to include additional coverage to your small business insurance as well. Sure, it may be a great thing to have a few cocktails right at the beach but will your bar get covered properly when the hurricanes come? Make sure it does when buying small business insurance.
Will you serve any foods at the bar?
See if your bar or tavern will serve any foods and include respective coverage into your policy.