Managing Risk, Protecting Your Business: Common Exposures for Bars, Taverns & Nightclubs

Managing Risk, Protecting Your Business: Common Exposures for Bars, Taverns & Nightclubs

| April 18, 2024

Bars, taverns, and nightclubs are popular destinations for socializing, but the presence of alcohol creates unique risks. These establishments face potential lawsuits and insurance claims due to factors like unruly patrons and irresponsible liquor service. Liability extends beyond property damage and crime – a single incident involving an intoxicated patron can lead to devastating consequences.

  • Liquor Liability: Lawsuits are common, with victims and families suing bars for serving patrons who cause alcohol-related accidents. Making matters worse, all it takes is a single liquor liability claim to put your entire business at risk. Liquor liability exposures for business owners can stem from selling liquor to underage individuals, overserving patrons and noncompliance with applicable legislation.

  • Property Damage: When discussing property exposures, fire and water damage are of particular concern, and businesses face an elevated level of risk due to things like open flames, the wide use of combustible items (e.g., tables and linens), complex HVAC systems, sewer backups and appliances connected to water lines (e.g., dishwashers)

  • Premises Liability: Slips, trips, and falls due to spilled drinks or uneven surfaces are common concerns. Something as simple as a spilled drink or an uneven surface can lead to an insurance claim. What’s more, because alcohol can impair your patrons’ motor skills, the likelihood of an incident at a bar, tavern or nightclub is typically higher than it would be for other businesses.

  • Equipment Breakdown: Malfunctioning equipment like refrigerators, beer taps, or cooking appliances can disrupt operations, cause closures, and even lead to property damage from leaks or fires. 

  • Crime: Cash flow and late-night hours make bars attractive targets for theft. In addition to stolen cash, equipment, merchandise, and supplies are all vulnerable. A bar's location and operating hours also influence its crime risk.

  • Food Safety: Foodborne illness, contamination, spoilage, and allergic reactions are potential consequences of improper food handling. A single incident can lead to legal action and reputational damage.

  • Violence: Physical altercations, including assault and battery, are a possibility at any bar. The business can be held liable for injuries sustained by patrons or staff during fights, muggings, or assaults.

  • Workers' Compensation: Slips, falls, repetitive motion injuries, sprains, and strains are common workplace accidents for bar staff. These incidents can result in workers' compensation claims for your business.

Proper risk management practices can reduce certain exposures, but no system is 100% effective in ensuring an incident-free workplace. As a result, it’s all the more crucial to work with a trusted insurance professional to assess your unique exposures. To learn more, contact us today.