The right bar insurance can help protect your investment from financial damage. With insurance, you don’t need to pay for damages resulting from insured risks from your revenue or savings. This may help improve your chances of running a successful business since you can instead direct your income towards revenue-earning streams. Here are some dos and don’ts of bar insurance:
Do Understand Your Bar First
Understanding your business’s risks is key to finding the most suitable insurance policies. As an alcohol-serving establishment, intoxication-related incidents like bar brawls are a constant risk, so you need liquor liability insurance. This policy can help cover injuries inflicted or damages caused to other people’s property by people drinking at your bar.
Your employees also risk getting hurt when working, so you need a worker’s compensation policy to cover their medical bills and compensate them for any lost wages. Other risks a bar can face include property damage and equipment malfunction. Find policies that can adequately cover every risk by consulting a reputable insurance agency.
Do Try a Business Owner’s Policy (BOP)
A BOP is an insurance policy combining commercial property, business interruption, and general liability insurance. Business interruption insurance covers losses incurred when you can’t operate your bar because of major events like fires and floods. Commercial property insurance steps in if your fixtures or equipment get damaged. General liability insurance can protect your bar from financial ruin resulting from legal troubles. Some insurers offer the combined package at reduced rates, so you can save money by bundling it instead of individual policies.
Do Consider Your Deductible Options
Insurance companies offer policies with high and low deductibles. Policies with high deductibles have lower premiums than those with low deductibles since you should pay a substantial amount out of pocket to cover damages when an insured risk occurs. A policy with a low deductible is ideal if you can’t afford to cover damages for expensive items out of pocket.
Don’t Rush to Sign an Agreement
You need to read the terms of your bar insurance policies before signing agreements to avoid paying for damages when an insured risk occurs. Pay attention to your policies’ inclusions and exclusions so you know what’s covered and what’s not. Identifying gaps in your policies before a risk occurs gives you time to look for alternatives.
Don’t Buy More Coverage Than You Need
Buying more coverage than you need can be expensive in the long run. Do your research to invest only in the policies you need to keep your operating costs manageable. An insurance agent can help you identify non-critical policies. Consult with one if you suspect you have more coverage than you require.
Don’t Choose the Cheapest Option
You may be tempted to get cheap insurance options to keep your costs down and improve your bottom line. This isn’t recommended, as your business may incur extra costs if you file an undercovered claim.
When choosing a policy, find a balance between cost and your business’s requirements. Some insurers are willing to negotiate premiums if you reduce your risk of losses. You may negotiate for lower liquor liability insurance premiums if you invest in alcohol server training. With proper training, your staff can recognize when clients are too intoxicated. They can then take measures to prevent fights or accidents.
Bar Insurance Is a Must-have
Every bar owner should invest in bar insurance to protect their investment when losses occur. When choosing policies, consider your bar’s unique needs so you can cover all your risks before they occur. Also, bundle up different coverages into a business owner’s policy to potentially save money, and assess your deductible options to determine the most suitable policy for your bar. Avoid signing any agreement without reading the fine print, buying more coverage than you need, and choosing the cheapest options, as these choices can prove expensive in the long run.
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