Pub insurance – what you need to know

Licensed trades like pubs and nightclubs operate within a strict regulatory environment, which can make buying insurance complex. Many insurers don’t offer pub insurance at all and others apply onerous terms and conditions. However, due to the nature of your clientele and manner of operation — long hours, late closing times, crowded premises and drunken customers — you are exposed to a number of risks.

Purchasing appropriate cover for your licensed business can help mitigate risk and ensure your safety and also the safety of your employees and customers. Because not all pubs and clubs operate the same way or serve the same people, covers can widely vary. Pub insurance should be tailored for each individual business, so make sure you assess the specific risks of your pub and purchase the appropriate covers or extensions. The following are some of the most common covers included in pub insurance.

Liability
As a publican, you are liable for your employees and customers on a daily basis. You should therefore be prepared to offset any damages caused by accidents or acts of negligence. There are three main types of liability cover to consider including in your pub insurance:

• Public Liability (PI) insures third-party injury, loss and damage resulting from business activities. ‘Third party’ includes any customers or visitors. If a customer were to slip and fall as a result of a messy floor, your pub would be covered with PI. You need to take extra care to ensure your establishment is never over capacity, which increases liability, and ensure that you purchase a suitable amount of liability cover to defend against your specific risks.

• Products Liability (PL) protects against accidental injury or damage resulting from a product sold by the insured. If a customer gets sick from a drink or meal your employee serves, PL cover helps mitigate the financial damages.

• Employers’ Liability (EL) is compulsory in the United Kingdom if a business has an employee other than the owner. EL covers employers in the event of an employee’s work-related injury or disease.

Building and Contents
If you own your business premises or are responsible for the building in the lease, you must ensure that you have adequate building cover. ‘Adequate’ means that the sum insured of your cover is enough to rebuild the building.

Contents cover can be more complex. Avoid redundant cover by purchasing a policy that mitigates your pub’s specific risks. Contents cover provides protection in a number of areas:

• Equipment Breakdown covers broken machinery/equipment such as point-of-sale computer systems, taps, refrigerators, and ovens or fryers.

• Stock covers beer, wine, spirits, cigars and cigarettes. It can also include damage to stock resulting from storms or product leakage if the stock is stored more than 15 centimetres above the floor.

• Employee Personal Effects covers the theft of employee personal property while working at the pub.

Business Interruption
Although the pub industry is resilient, there have been many closures over the last few years and it is still difficult for pubs to resume business after a loss. Even if the loss was insured, without business interruption (BI) cover, publicans can lose hard-earned profits and income they would have gained had the loss not happened. This can cause a pub even greater hardship or even force it to shut down permanently. BI can cover loss of income and profits and help keep your business afloat, even if the pub has to temporarily close.

Other Common Covers
Pub insurance can also include the following additional common covers:

• Legal Expenses covers contract and employment disputes, criminal offences, legal actions from third parties, etc.
• Theft by Employees and Third Parties covers employee or third-party theft.
• Glass covers sanitary ware, broken fixed glass, signs and reasonable boarding-up costs.
• Loss of licence which offers a safety net should you lose your licence.

We Are Here to Help
It’s not easy to find the right cover at a competitive price and even harder to find an insurer that understands the unique issues facing the licensed trade. A-Plan has been providing insurance for pubs and clubs for many years and our specialist team really understand this market.

For a quote, apply online or call our pub/nightclub insurance team on 01582 733 757.