A bar or restaurant is exposed to liabilities from third parties like customers, vendors, and workers. Getting liability insurance can protect the business from risks by covering legal fees and settlements during litigations. General liability insurance and liquor liability insurance are the two popular coverages for bars and restaurants. Other policies include commercial property insurance, errors & omissions, business owner’s policies, directors & officers, and worker’s compensation.
3 Reasons Why You Need Liability Insurance
Liability insurance covers a specific liability up to a given limit. General liability insurance covers common risks like customer injuries and property damage at your bar. The policy also covers advertising injuries and is required for most property leases. Business owners’ policies often bundle commercial property and general liability into one coverage. Here is why you should consider liability insurance for your bar or restaurant:
1. Establish Credibility and Meet Legal Requirements
Most states require bars, restaurants, and other small businesses to have minimum coverage, including business insurance and worker’s compensation. Business liability insurance can protect you if a fire destroys your bar or inventory. The policy can also protect you if someone steals a computer with your client’s personal information.
Business partners and contracts might require insurance protection even if your state doesn’t impose mandatory policies. Contracts like renting a building or borrowing large amounts to finance your inventory can require insurance. Purchasing liability insurance also protects your customers by covering property damages and bodily injuries suffered at your business. Bar and restaurant owners should get liability insurance to build credibility with the government, employees, vendors, contractors, and customers.
2. Protect Your Business Assets From Risks
The main reason why bars and restaurants need liability insurance is to protect business assets and keep their doors open. Bars and restaurants face risks from different angles. A fire can bring down the business and stock, leaving the bar unable to operate without help. Vandals can also damage a leased vehicle. Insurance can pay for the cost of repair and rebuilding, replace lost stock, and even protect business income and payrolls. Liability insurance protects business assets against third-party lawsuits from customers, employees, vendors, and partners.
If the bar is sued, the insurance can pay legal fees and settlements for bodily injuries and property damages. Insurance also protects business owners from personally paying expenses or bills to cover litigations. Purchasing adequate insurance policies protects the main business assets, including the property, inventory, personnel, and patrons. You can find coverage for everything from natural disasters to commercial auto risks like vandalism and cyber liability insurance. You can perform a risk assessment to identify all assets that need the most protection.
3. Increase Confidence and Peace of Mind
Purchasing enough insurance coverage can help attract and retain employees at your bar or restaurant. Employees can look beyond salaries to find additional perks like health insurance and worker’s compensation. If workers get injured at work and become disabled, they want to know if the company will provide them with benefits. Experienced managers, directors, and officers also want to be protected from various risks and liabilities. Insurance policies protect your CEOs and supervisors from costly lawsuits as it pays for the legal fees involved.
Buying liability insurance can increase confidence in your business because the employees, managers, and customers are protected. Insurance can help your business rebuild and reopen after natural disasters like floods, fires, and tornados. The policies also cover assets, inventories, payrolls, revenue, and more, reducing the risks that can put you out of business. Bar and restaurant owners can have peace of mind knowing their business is safe from common threats and litigations.
General Liability Insurance for Bars and Restaurants
General liability insurance is one of the first insurance policies bars and restaurants need. The insurance covers general liabilities from third parties like patrons. If someone slips and breaks their leg at your restaurant, they may try to sue your business. An intoxicated patron can also start a fight or cause an accident down the road after leaving your bar. General liability policies protect your business from such risks. You can also combine liability insurance with commercial property insurance and other add-ons to create customized insurance coverage for your bar or restaurant.