The Guide to Nightclub Insurance in Toronto
Feb 15, 2020
Nightclubs are great to let loose, drink and have fun in but the reality is that all of these aspects can quickly lead to claims and injuries. As we all know, mixing alcohol into any equation can cause disastrous results - nightclubs and bars are no different. Owning a restaurant or retail business has its risks; adding low lighting, alcohol, and a lot more people in one space can definitely increase the chances and severity of those risks. That's why nightclub insurance in Toronto requires more than just a CGL and Equipment Breakdown coverage. We explain the insurance coverage you need to look for:
Own a restaurant or bar? Learn how commercial insurance protects restaurants.
To begin with, you should already be considering these three coverages when it comes to nightclub insurance in Toronto:
Commercial General Liability Insurance (CGL)
Commercial General Liability insurance, or CGL, provides protection against:
-Bodily Injury and Property Damage
-Personal and Advertising Injury
-Tenants Legal Liability
-And in some cases, can include Employers Liability and Non-Owned Automobile Liability coverages.
All businesses should be carrying a CGL policy as it covers defense and damages against a lawsuit if your products or services cause or are alleged to have caused bodily injury or property damage to others. As a nightclub or bar owner, you know how often a drink or bottle gets dropped or spilled on the ground. Having a CGL policy can protect you if someone slips on a Gin and Tonic, gets injured and sues you; it would help cover damages, medical and legal fees.
You can't predict or protect yourself from a lawsuit arising. Litigation may be someone's only option to eliminate their liability or cover their medical expenses. It also allows for peace of mind and credibility.
Commercial Property insurance coverages protect a company's physical assets against loss or damage from a broad range of causes. This doesn't only apply to buildings or units but inventory, equipment, furniture or installed fixtures too! If a fight breaks out and furniture gets broken, you can sleep easy knowing you have property insurance coverage. Property of others that is in the care, custody and control of your business would also be covered which further protects your company.
In this situation, products liability can also be referred to as liquor liability coverage - since the product you're providing is obviously liquor. With every bar or club that serves alcohol, the concern is always over-intoxication. Of course, you can hire employees with Smart Serve certification but the reality is there are many factors out of your control when it comes to serving someone who may have already had too much to drink. People often drink before going out and will continue to bar-hop after they visit your establishment. Even if someone leaves your club, gets over served at a completely different establishment and then gets injured, you can still be found liable for contributing to their overconsumption. The legal fees alone could severely harm your business and profits without the right insurance coverage.
Often product liability claims exist because:
- The product injured the consumer's body
-The product injured the consumer's property
-The food or beverage product made the consumer ill
Money, forgery and other financial assets/instruments are not included in your CGL or property insurance coverage. If you have bottle service or make a lot of alcohol sales, money can add up quickly for your club or bar. That's great news but it also quickly makes you a target for theft or fraud from people outside, and unfortunately, inside your business. Not only does crime coverage include fraudulent checks, counterfeit money and credit card fraud; but acts of fraud and theft committed by one of your own employees.
Learn more about Commercial Crime Insurance.
Business Interruption or Business Income insurance is not a stand-alone coverage. It is an extension of business property insurance that can cover profits, fixed costs - including ordinary payroll and extra expenses - when a business property claim arises to cover the profits you would have earned had the loss not occurred. This can be extremely important coverage as extra expenses can interrupt the ability for a nightclub to continue servicing its customers and meeting contractual obligations. Say you have a fire and need to close for repairs; without this coverage extension, your nightclub may have to permanently close.
Equipment Breakdown can provide coverage for loss or breakdown due to mechanical or electrical breakdown of nearly any type of equipment. Say someone spills a beer on your DJ equipment and damages it; this insurance could provide coverage.
Between the late hours and the intoxicated customers, owning a nightclub or bar can be a really stressful job. Having the right nightclub insurance in Toronto can take some of the weight off by giving you the peace of mind you deserve. Whether you own a nightclub, a bar or a restaurant in Toronto, at Foxquilt, you can join up with other service industry entrepreneurs for group business insurance savings!
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