Restaurant & Bar Insurance

Things to Keep in Mind When Insuring Arizona Nightclubs, Taverns, and Bars

September 22, 2016

By: Kathy Griffith – Senior Underwriter, Worldwide Facilities

The legal and insurance landscape for nightclub, tavern, and bar owners is more challenging in Arizona than in other states. Unique laws and conditions affect products such as liquor liability and firearms coverage throughout the state, making it one of the more difficult places for venue owners to get proper insurance.

To get the coverage they need, it’s essential for owners to work with a professional accustomed to dealing with complex exposures in this industry. Here’s an overview of some of the coverages needed and issues to consider.

General liability insurance

Many GL policies have firearms exclusions. This is an especially big issue in Arizona at the moment because the state allows people with concealed weapons to take their guns into bars, unless signage has been prominently posted forbidding it. Because of this, it’s crucial for owners to know their risk with regard to firearms and whether they have such an exclusion.

Assault and battery coverage

Much of the time, general liability policies carry assault and battery exclusions when the insured is a bar, tavern or nightclub, and liquor liability insurance often won’t cover this type of claim. Risks and costs vary depending on the size of the establishment, security, crime reports in the area, and other factors, but even bars and nightclubs considered low-risk should have this coverage.

Liquor liability coverage

In Arizona, it’s particularly important to carry appropriate levels of liquor liability coverage. If an employee serves alcohol to a minor or an obviously intoxicated person, the business may be held responsible for damages and bodily injury resulting from alcohol consumption—even if the damage occurred off the premises. In addition, bars, taverns, and nightclubs can be named in lawsuits even if they only served one beer to a patron who later went on to cause injury or damage property.

Coverage for activity hazards

After a few drinks, patrons could easily injure themselves in circumstances that wouldn’t be that dangerous when they’re sober—from falling off a mechanical bull to falling off a bar stool. Sometimes, claims that stem from hazardous activities can be covered under a liquor or general liability policy; however, it’s more common for these activities to be excluded. Insurance agents need to ask careful questions to determine what activities happen in the bar—down to the flaming shots on the menu or the weekly Flip Cup tournament—and add endorsements when needed.

Venue owners can put their businesses at great risk when they are not aware of their exposures. It’s not unusual for owners to end up with firearms exclusions in a state with permissive gun laws, or to have more limited assault and battery coverage than their risk calls for. It’s crucial for insurance agents in this market to work with a wholesale insurance broker who understands the challenges unique to these venues—and can help them get their clients the coverage they need.

For more information contact Kathy Griffith at kgriffith@wwfi.com or (602) 680-2011.

 

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