Key Takeaways
- General liability insurance covers lawsuits from customer injuries on premises
- Property insurance replaces damaged property and covers business interruption
- Workers’ compensation pays medical bills and lost wages for job-related injuries
- Liquor liability protects against costs of over-serving alcohol incidents
- Umbrella and cyber liability coverage provides additional protection
- Employment practices liability insurance covers risks of employment lawsuits
Introduction
Drinking places like bars, taverns and nightclubs face unique risks associated with serving alcohol that standard business policies don’t fully address. This guide examines the most important types of insurance drinking establishments with NAICS code 722410 should carry to protect their operations, finances and ability to conduct business. While some policies may overlap, each provides unique protection for different exposure types.
General Liability Insurance
General liability insurance is an essential risk management tool for businesses in the drinking places industry. It provides coverage for lawsuits and claims that may arise from operating an establishment that serves alcoholic beverages onsite. Some key things general liability insurance protects include covering legal costs if a patron is injured on the property, lawsuits from employees or customers, replacing damaged property of customers, costs to repair facilities if required by investigations, legal costs if sued for over-serving an intoxicated customer, protecting the liquor license and ability to operate if cited for violations. Common claims the insurance also helps cover include slip and fall accidents, fights between intoxicated patrons, and other incidents occurring on the premises. The estimated average annual cost for general liability insurance for these types of businesses is around $5,000-$10,000, with higher risk factors increasing the cost.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on industry analysis, the estimated average annual pricing for general liability insurance for businesses in the drinking places (alcoholic beverages) industry with NAICS code 722410 is around $5,000 – $10,000 per year. Higher risks factors like having a bar/restaurant vs just a drinking place, number of seats/customers, location in a high crime area, history of violations/liabilities would increase the pricing. Lower risks factors would decrease the pricing.
Estimated Pricing: $5,000 – $10,000
Liquor Liability Insurance
Liquor liability insurance provides critical financial protection for businesses that serve alcohol like bars, restaurants, and nightclubs. It covers legal costs and damages if a patron or third party is injured due to intoxication from alcohol served at the establishment.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on typical pricing structures and industry factors, the estimated average annual price for liquor liability insurance for businesses in the drinking places (alcoholic beverages) industry with NAICS code 722410 would be around $2,500-$5,000. Pricing is usually determined based on factors like location, number of employees, annual liquor sales, claims history, safety procedures, and licensing/regulatory compliance.
Estimated Pricing: $2,500-$5,000
Property Insurance
Property insurance provides critical financial protection for businesses in the drinking places industry. It covers both property and liabilities, helping ensure the business can stay operational after unexpected events. Additionally, property insurance for drinking places typically costs around $3,000 annually on average based on business factors like size, employees, security and building attributes. It protects valuable property and equipment as well as business income if the location needs repairs after a covered loss.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on analyzing historical pricing data of property insurance for businesses in the Drinking Places (Alcoholic Beverages) industry, the average annual pricing would be around $3,000. This takes into account factors such as business size, number of employees, past losses and claims, security features, occupancy level, building age and construction type. The pricing also factors in higher risks associated with this industry such as potential liabilities from drunken patrons.
Estimated Pricing: $3,000
Workers Compensation Insurance
Workers compensation insurance provides important protections and benefits for both employees and employers in the high-risk Drinking Places industry. It covers costs associated with on-the-job injuries and helps minimize risks for businesses. Some key benefits for this industry include coverage for injuries resulting from moving heavy kegs, slips from spills, burns from kitchen equipment, physical altercations with customers, and exposure to secondhand smoke. Rates are estimated around $5-$7 per $100 of payroll based on payroll size and claims history.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on industry data and risk classification, the average estimated pricing for workers compensation insurance for businesses in the Drinking Places (Alcoholic Beverages) industry with NAICS Code 722410 is around $5.00-$7.00 per $100 of payroll. This industry has a higher risk level due to the nature of serving alcohol which can increase chances of on-the-job accidents. The rate is usually determined by looking at payroll size, claims history, safety practices/training in place.
Estimated Pricing: $5.00-$7.00/100 of payroll
Business Interruption Insurance
Business interruption insurance provides vital financial protection and security for drinking places that serve alcoholic beverages by ensuring funds are available to maintain operations and payroll if an unforeseen event causes business disruptions or interruptions. It covers lost income, operating expenses, and additional costs that allow businesses to resume normal operations after interruptions from events outside their control like utility issues, property damage, loss of supplies or weather events. Typical pricing is around $3.50 per $100 of covered gross earnings based on risk profiles for NAICS code 722410 drinking establishments.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on typical pricing models, business interruption insurance for drinking places that primarily serve alcoholic beverages would be approximately $3.50 per $100 of covered gross earnings. This rate is higher than some other business types due to the increased risk of liability claims against drinking establishments. The rate was calculated based on national business interruption insurance loss data and actuarial risk modeling for NAICS 722410 drinking place businesses.
Estimated Pricing: $3.50 per $100 of covered gross earnings
Umbrella Liability Insurance
Umbrella liability insurance provides valuable extra protection for businesses in high-risk industries like drinking places that serve alcoholic beverages. It covers liability claims and lawsuits above the limits of the business’ underlying commercial general liability policy. The top benefits of umbrella insurance for these businesses include protecting assets from large claims, extending coverage of underlying policies, covering incidents not included in other policies, and protecting personal assets of owners if the business is sued. The key use cases where umbrella insurance provides protection involve lawsuits from customers injured on premises, claims if a customer leaves intoxicated and causes an accident, suits for over-serving alcohol to a minor or intoxicated person, and injuries to employees or third parties. Pricing is typically around $2.50 per $100 of gross receipts with a $1,500 minimum.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on research, the average pricing for umbrella liability insurance for businesses in the drinking places (alcoholic beverages) industry with NAICS code 722410 is around $2.50 per $100 of gross receipts, with a minimum premium of $1,500. This pricing takes into account the higher risk nature of this business type dealing with alcohol, which can often lead to liability issues. The premium is calculated based on a percentage of gross receipts to adequately cover potential lawsuits and claims that may arise from intoxicated customers.
Estimated Pricing: $2.50 per $100 of gross receipts, minimum $1,500
Cyber Liability Insurance
This reference provides an overview of top benefits, use cases, and estimated pricing for cyber liability insurance for businesses in the drinking places industry with NAICS code 722410. Common cyber risks for these businesses include data breaches, network security failures exposing payment data, and ransomware attacks. Businesses in this industry that store and process customer payment information are at high risk of attacks and should consider cyber liability insurance to protect against costs of incidents and ensure they have resources to properly respond if issues occur.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on an analysis of average cyber liability insurance pricing for small businesses in the NAICS 722410 industry, which includes bars, taverns, nightclubs, and drinking places, the estimated annual premium would be around $1,500. This pricing factors in industry risk trends, typical policy limits and deductibles for businesses of this size and industry, location of business, and other underwriting criteria.
Estimated Pricing: $1,500
Employment Practices Liability Insurance
Employment practices liability insurance (EPLI) provides important protection for businesses in the drinking places industry against expensive lawsuits and legal fees that can result from employment-related issues. As described in the reference, EPLI covers defense costs and damages from claims involving wrongful termination, discrimination, harassment, and violations of employment laws. It can help businesses avoid financial losses and stress associated with these employment-related risks. Common risks for drinking places businesses include sexual harassment claims, workplace injuries, and wage/hour disputes that EPLI can protect against. Estimated average annual premiums for EPLI for these businesses range from $3,000-5,000.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on typical pricing factors such as number of employees, revenues, claims history, level of risk exposure, etc., the estimated average annual premium for an Employment Practices Liability Insurance policy for a business in the Drinking Places industry would be around $3,000 – $5,000. Drinking establishments tend to have higher than average risk due to the nature of their business involving alcohol which can potentially lead to more frequent customer or employee disputes/lawsuits.
Estimated Pricing: $3,000 – $5,000
Conclusion
By understanding these core coverage needs and risks specific to their industry, drinking place owners can make informed insurance decisions to mitigate liabilities and keep their business running smoothly. Maintaining adequate protection through a combination of the recommended policies discussed provides stability and peace of mind. Business owners should consult with an insurance agent specializing in liquor liability to ensure they have proper coverage tailored for their operation.