If you operate a restaurant where bottle service or high liquor sales are a key part of your concept, you may find it more challenging to find insurance. While standard restaurants can often acquire low-cost insurance from big-name insurers, restaurants with bottle service or high liquor sales are regularly declined by these same carriers. But it certainly is not impossible for such restaurants to find good insurance! You just have to work with a broker who knows how to get it done.
Why is it more challenging to find insurance for a restaurant with bottle service or high liquor sales?
Insurance companies don’t really care about the word “restaurant”, they care about risk profile. And bottle service pushes you toward a riskier category in their eyes. Insurers rank restaurants along this scale:
- standard restaurants (least risky)
- bars (medium risk)
- night clubs (riskiest)
Insurers (especially the standard, big-name insurers that usually offer low-cost insurance to restaurants) will often group restaurants that offer bottle service into the “night club” category, even if the restaurant is not a night club. These insurers are concerned that bottle service or high liquor sales will lead to more frequent claims stemming from intoxicated clients, late-night activity, security incidents, etc. These insurers are nervous about this even if your restaurant is up-scale, well-managed, and completely safe. For this reason, many of these insurers will simply decline on the front-end.
Oftentimes brokers who are less experienced in commercial insurance will only apply with these conservative, big-name insurers. When these carriers inevitably refuse to send a quote, the broker reports to the restaurant owner that there just aren’t any insurance options available. But this is not the case! There are many insurers that specialize in just this type of restaurant. You just need to work with a broker who knows where to look.
How to properly insure a restaurant with bottle service or high liquor sales
1) Know where to look.
Here at Mighty Oak we specialize in insuring business owners who would normally struggle to find insurance. This means that we know to look beyond the big-name insurers (who are very good at saying “no”) and instead explore the broader insurance market, which includes insurers that specialize in all varieties of restaurant insurance, from bars to Michelin Star restaurants to nightclubs, and everything in between. Our contacts with underwriters at a wide variety of insurers allows us to move quickly, so that your restaurant opening is not delayed due a failure to acquire insurance in a timely fashion. And though it’s true that restaurants with bottle service are likely to pay more for insurance than a pizza shop, we will always shop around to make sure you get the most competitive pricing available!
2) Know which coverages are crucial.
A standard “Business Owner Policy” for a restaurant will automatically include liability coverage, and will insure the contents of the restaurant (furniture, computers, food). This is a great start, but it isn’t the whole picture. For a restaurant offering bottle service, “liquor liability” is a critical part of the policy that many brokers will overlook. This coverage specifically insures your business in the event a claim stems from an intoxicated client. Making sure the policy includes this coverage prevents the carrier from denying a liquor-related claim.
Another important coverage to look for is “assault and battery coverage”. In the event (for example) a rowdy client picks a fight with a staff member, assault and battery coverage can pay for your business’s legal defense, medical bills, and settlements. This is a crucial coverage for establishments with high liquor sales, as well as restaurants that employ security or operate in higher-risk areas. You need to work with a broker who knows to add these features to your policy.
Bottom line
It is certainly not impossible to find insurance for a restaurant offering bottle service. Yes liquor sales, a late-night crowd, and the location are all factors that might make finding insurance more challenging (especially for less-experienced brokers), we know how to navigate this market and get your restaurant insured. And we won’t offer you a quick policy that’s missing key ingredients, because our primary concern is to make sure your business is insured properly. We know where to find the right policies, we know what to look for in these policies, and we know how to explain the coverages in a simple and straightforward way so you know what you’re buying.
Reach out today to get quotes!