Top 10 Insurance Concerns for Bars & Restaurants Assault & Battery To Patrons.
Assault & Battery Coverage for Bars and liquor selling firms, defined: Bodily injury and medical costs sustained by a patron during a physical
altercation with another patron or a bar employee while at the
establishment. Assault or Battery typically means harmful or offensive
contact between two or more persons, including threats, sexual assault,
abuse or molestation.
Liquor Liability Coverage.
While the location, size, nature of
onsite activities/games, security, and clientele of the bar either
elevates or reduces the bar owner's ultimate risk of Assault- or
Battery-related injuries to patrons, even the best run, most low-key
establishment faces some risk of incident and subsequent Assault or
Battery claim. Insurance carriers address this increased risk in a
number of ways, including;
far, the worst and understandably least expensive policies available
will eliminate coverage for Assault and Battery (by policy exclusion)
or reduce the limits available to a small fraction of the typical
$1,000,000 policy - perhaps issuing a $25,000 "sublimit" for Assault
and Battery coverage.
- mandatory inspections of the premises by their personnel prior to policy acceptance;
underwriting of the bar through periodic review of area crime reports,
past loss history, experience of the management, and other factors;
- dramatically increased costs for both General Liability and Liquor Liability policies;
- significant reduction in coverage limits for Assault- and Battery-related claims.
Assault and Battery is frequently broadly defined to include:
Read Hill & Usher's Green & Gold about Assault and Battery
- Protection of persons or property at the premises
- Prevention or suppression of an Assault or Battery
- Negligent hiring or supervision of an employee with this context
- Failure to implement adequate security, monitoring or surveillance
Individual State laws along with court rulings in the
state in which the alcohol is served or sold establish the legal
climate for liquor liability claims; accordingly, the state legal
environment will affect both insurance premium rates for liquor
liability policies as well as the limits of coverage advisable to
ensure adequate protection.
Valuation of Property: Actual Cash Value (ACV) vs. Replacement Cost (RC).
Arizona Laws. Arizona is
considered a moderate legal climate for liquor liability lawsuits
because the law does not impose broad strict liability on the seller
for bodily injury and property damages that might arise after the sale,
with exception for the sale of liquor to either minors or "obviously
intoxicated" persons. AZ Revised Statute 4-312 limits the bar or
restaurant's strict liability for those of the drinking age.
Find Title 4, the current Arizona statute here: http://www.azleg.state.az.us/ArizonaRevisedStatutes.asp?Title=4
the Arizona statute imposes liability upon the bar or restaurant for
the injuries caused by minors and/or "obviously intoxicated" persons
served in the establishment, the need for Liquor Liability coverage is
strong. Attorneys who represent liquor serving establishments would
further advise limiting liability by establishing the company under a
Limited Liability Company or Corporation to protect the personal assets
of the owner.
Property insurance policies for bars and restaurants is commonly written on Actual Cash Value.
Business Income & Extra Expense
Wise restaurant and bar operators protect themselves and other
stakeholders in the establishment by insuring buildings, contents and
other property with limits sufficient to rebuild or replace damaged
property. But what happens while that property is being replaced?
Property damage can often be extensive, even total. Such loss can
certainly shut down or greatly reduce business operations for a time.
Would it be just a few weeks or would it be several months or more? How
are lost profits and other ongoing expenses replaced during a shutdown?
Such questions highlight the importance of Business Income and Extra
Expense for restaurants. Computers can be damaged or a
complete loss. Paper and other records can be totally destroyed.
Building rehabilitation and, in a worst-case scenario, full
reconstruction take time - sometimes half a year or more
if the original premises did not take that long to build. Don't forget
to factor in the time to even get all the plans and permits ready. How long would it take you to get your operation back up and running
even under the best of circumstances and with plenty of funds set aside
to cover all unforeseen expenses? Such unexpected interruption can cut
deep into cash flow and savings. Natural disasters
(all too common) and terrorist events
have proven to severely interrupt business income and personal earnings
of millions of people. Sad as it is to even recall, there were
thousands of restaurants and bars at and near ground zero in New York
on that fateful day.
And in New Orleans when Hurricane Katrina
hit, just think about all the various eating and drinking
establishments that literally went under. Think of the people who owned
the enterprises. Think of those who had to make the tough economic
decisions to shutdown to never reopen again, anywhere. Did they all
have flood insurance
? Well, did they all have all-important Business Income Insurance
Many additional eateries, pubs, bars, nightclubs ... faced surprise income interruptions
during the California wildfires
These things (flood, fires, attacks, etc.) happen, and highly
intelligent businesses make sure of their coverage adequacy and limits
by consulting qualified insurance brokers and risk managers.
You can be sure that the largest and best run chains carry Business
Income. Of course they can help spread their losses across other
locations not directly hit by a disaster, large or small -- all the
more reason for the smaller chains and single-location establishments
to have full coverage.
And as we've seen, it doesn't matter which state you're in,
disasters strike and accidents happen. Those smart enough to prepare by
obtaining solid insurance coverage are able to budget their expenses
and to position their business or businesses to ride out a period of
little or no income to cover salaries and all other continuing
expenses. They are able to continue paying bills and supporting their
valuable and highly skilled and trained employees.
Because Business Income and Extra Expense can take on a number of
formats, bar and restaurant owners should take great care when
selecting limits, choosing coinsurance percentages, including/excluding
payroll of non-management employees, and maximum periods during which
coverage applies. Workers Compensation for Active Owners
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Agency Services, Premium Financing and Client Advocacy in the event of a loss.