Pub Insurance - What Cover Do I Need For My Pub Business?

Monday, 08 June 2015, Jon Norman

Pub Insurance - What Cover Do I Need For My Pub Business?

Whether you are buying your first public house or are an established publican, the risks when running a pub or restaurant can be significant.  From property damage to the property itself, to injury to customers or staff, claims can quickly become a significant threat to your business.

When running a pub, you face a variety of risks that can endanger the viability of your business. Due to the nature of your clientele and manner of operation — long hours, late closing times, crowded premises and drunken customers — a number of risks you’re exposed to are unique to the pub industry.

Purchasing appropriate Pub Insurance can help to mitigate risk and ensure your financial security and also the safety of your employees and customers. Because not all pubs 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 within Public House Insurance.

Liability Insurance

As a publican, you are directly responsible for the safety of your employees and customers that frequent your business on a daily basis. Accidents or acts of negligence can all cause claims against your business. There are three main types of liability cover to consider:

#1 Public Liability

Public Liability Insurance provides indemnity against third-party injury, loss and damage resulting from your business activities or the actions of your employees. In respect of a public house ‘Third party’ includes any customers, suppliers or visitors.

For example, if a customer were to slip and fall as a result of a wet floor, or your brewery representative fell from a faulty bar stool and broke their leg, they may deem you liable and seek compensation for their injuries. 

One key area to look at is your pub capacity, 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 from multiple claimants.

#2 Products Liability

Products Liability Insurance protects your business against accidental injury or damage resulting from a product that you have sold or provided, for example, if a customer were to get sick from a meal or drink that you or your employee may serve them.  Products cover will mitigate the financial damages from any such claims. 

It is also worthy of note that claims can still arise regardless of whether you have charged for the product or not – as such, take particular care with nuts or other items left on the bar, particularly in respect of allergy information provision which can be a common cause of claim.

#3 Employers Liability

Employers Liability Insurance is a legal obligation for any business employing staff in the United Kingdom.  Employers Liability provides cover for you and your business in the event of an employee suffering a work-related injury or disease in the course of their employment and holding you responsible. For example, one of your bar staff cuts their hand whilst filling the glass washer or falls down a broken step to the cellar whilst changing a barrel.

Building, Fixtures & Fittings and Business Contents

#1 Buildings

If you own the freehold of your pub premises, or are responsible for the building under the terms of your lease, you must ensure that you have adequate buildings insurance cover. ‘Adequate’ means that the sum insured of your cover is enough to rebuild the building. Otherwise, your insurance cover may not fully account for rebuilding costs and you will have to pay out-of-pocket.

#2 Fixtures & Fittings, Business Contents

It is easy for a Pub to miscalculate or underinsure cover for business contents, particularly if a brewery has subsidised a fit-out.   You need to review sums insured carefully to ensure that all limits are adequate to cover replacement.  As well as business contents you may want to consider cover in the following area:

  • Equipment Breakdown covering broken machinery/equipment such as point-of-sale computer systems, taps, refrigerators, and ovens or fryers.
  • Stock-in-trade covering 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.
  • Personal Contents or Employee Personal Effects covering theft, loss or damage to your own personal contents or your employees personal property while working at the pub.

Business Interruption

Getting your pub up-and-running again after a significant claim, such as a flood or fire, can prove very difficult.  In fact, according to research from our insurance partners, Chubb, over 70% of businesses involved in a major fire either do not open, or subsequently fail within 3 years of the incident.

If the loss itself was insured, without business interruption protection, publicans can lose hard-earned income and profits which you would have gained had the loss not occurred.

Serious claims can put your pub under severe financial hardship or even force it to shut down. Business Interruption can cover fixed costs and expenses, loss of income and profits in the event that insured damage prevents your pub from operating, keeping your business afloat, even if the pub has to temporarily close.

Loss of Licence

It might sound obvious, but a liquor licence is pretty essential to your business — without it, you cannot legally serve alcohol. For reasons beyond your control, such as a policy or legislation change, you could potentially lose your licence with no back-up plan to keep your business running. Loss of licence cover helps to mitigate this risk by offering a safety net should you lose your licence. However it is worthy of note that Loss of Licence cover does not cover a loss due to negligence or unsanitary conditions.

Other Potential Areas of Cover

Pub owners also often opt for the following additional common covers.

  • Legal Expenses covering 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.

Compare Restaurant Insurance

FREE Business Insurance Review

Insync specialises in cover for the leisure and hospitality industry.  We can Compare Pub Insurance from the UK’s leading insurers to ensure that you get the right level of cover to protect your business at the right price.

Policies are tailored to your exacting needs, so that you only pay for the cover you need.  Request a quotation online, alternatively, why not book a free review with one of our expert Gurus at a time that suits YOUR diary.

About the Author

Jon Norman

Jon Norman

I’m passionate about family, sport, technology and business.

In fact, I have always been fascinated by business, whether it was running the school tuck-shop or my Saturday job in the local store, I was always looking for ways to improve or view things differently.

I have enjoyed an amazing career fast approaching 25 years in the insurance industry, which has given me real insight into the challenges and opportunities faced by SME businesses in today’s ever-evolving marketplace.

I co-founded Insync Insurance, to offer companies a new way to buy and manage their business insurance. A synergy of digital servicing and personal expertise - utilising the latest technology to enhance relationships, not to replace them.

Leave a comment

You are commenting as guest.