Owning and running a nightclub can be a fun and extremely lucrative endeavor. These businesses require a large initial investment, so it’s a good idea to protect yours with an appropriate nightclub insurance policy. Cacciatore Insurance can help you get set up with all the insurance your business needs.
U.S. Nightclub Industry Statistics
- There are over 20,000 bars and nightclubs in the U.S
- Chicago has over 1500 nightclubs & bars
What Insurance Policies Do Nightclub Owners Need?
No matter whether you own a large nightclub that features live bands or a small, private club, you will need to have insurance coverage. Some insurance policies are required by law, while others may be required by lenders if you have taken out a business loan. You could also be required to carry insurance by your landlord if you rent your club space. Optional coverage is available and highly recommended because business establishments that serve alcohol have an increased risk of damages and liability claims.
Some insurance policies that nightclub business owners can consider include the following:
Unemployment insurance: This insurance coverage is required by law. It is typically included as part of your state taxes. Once you establish and register your nightclub with your state’s workforce agency and begin paying taxes, your business will be usually be covered.
Disability insurance: This coverage is only required by law if your nightclub is located in Illinois
Medical insurance: If you employ at least 50 full-time people, the Affordable Healthcare Act requires you to subsidize health insurance.
Nightclub insurance: This is a business insurance policy designed specifically for owners of nightclub establishments. It includes the coverage options necessary to protect your nightclub from the risks inherent to the entertainment industry.
Nightclub Insurance Provides Liability Coverage
Nightclub liability insurance can protect you from the potential lawsuits that may be filed against your establishment. There are different types of liability coverage you can purchase. In each case, your liability insurance coverage will provide compensation for any related court costs and legal fees.
General liability insurance: This provides coverage for property damage or bodily injury if a patron is injured in your nightclub or a perimeter area such as the parking lot. Frequently, nightclub insurance policies exclude coverage for situations where the party involved is injured due to intoxication after being served in your establishment. For that coverage, you will need liquor liability insurance.
Liquor liability insurance: People tend to consume alcohol while in nightclubs. Unfortunately, this puts you at risk for liability claims. Liquor liability insurance provides coverage for any property damage or bodily injuries caused by patrons who have become intoxicated in your nightclub. Often, liquor liability insurance policies exclude coverage for injuries sustained in fights. For that coverage, you will need assault and battery liability insurance.
Assault & battery liability insurance: Excessive alcohol consumption can lead to violent and erratic behavior. If a fight breaks out in your nightclub, you may be held liable if it can be shown that you failed to provide a safe environment for your patrons. Security personnel and bouncers can prevent many instances of assault and battery claims against you.
Bouncer liability insurance: Having bouncers on your staff is important to minimize the occurrence of fights and belligerent behavior by intoxicated guests. These bouncers can sometimes cause physical injuries to patrons when ejecting them from the club, and if your bouncer or your establishment is sued for bodily injury liability, this insurance coverage will provide compensation. This will also cover any injuries sustained by your bouncer while on the job.
Garage-keepers liability insurance: If your nightclub provides patrons with valet parking, this insurance will provide coverage if a vehicle is damaged while in your care.
Concert liability insurance: If your nightclub is serving as a venue for an indoor or outdoor concert, you may be required by the performer to carry concert liability coverage for potential damage to the performer’s equipment or medical costs if the performers or their entourage are injured.
Event liability insurance: If a group rents out your establishment for a special event, it’s a good idea to be sure that they have purchased a special event insurance policy for that evening. These are one-time policies that offer liability coverage as well as coverage for any damage that might be done to your nightclub.
Workers compensation insurance: If one of your workers is injured on the job, you could be responsible for covering any related medical costs. Workers compensation insurance will provide medical treatment coverage.
Nightclub Insurance Protects Your Property and Assets
You can protect your nightclub’s property and assets with an insurance policy tailored to your needs. The following coverage options will likely be available with your nightclub insurance policy:
Building insurance: This is necessary if you own the building in which your nightclub operates. It will provide coverage for damages to the structure of the building due to severe weather events, fire, falling objects, and vandalism.
Contents insurance: This provides coverage for all property kept inside your club. This includes everything from furnishings and decorative touches to your supply of alcohol. It may be necessary to purchase additional riders for specialty items such as outdoor signs, large glass windows, lighting and sound systems.
Equipment breakdown insurance: If a power surge or mechanical failure causes equipment failure in your nightclub, you may have to close your club until repairs or replacements can be made. Important equipment can include sound systems, lighting, heating and cooling systems. This coverage will provide financial assistance for repairs or replacements so that your club can be open for business quickly.
Utility interruption insurance: This insurance coverage will reimburse you for lost income if a utility outage results in lost income for your establishment.
Lost income insurance: If your nightclub is forced to close temporarily, this insurance may provide you with a continuation of income. This way, you can continue to pay your required expenses and employee salaries until you reopen. This coverage is usually limited to twelve months.
It is important to know that flood damage is nearly always excluded from your property and assets coverage. Flood waters can destroy flooring, electrical equipment and furnishings inside your establishment. If your nightclub is located in an area that is at risk for flooding, a business flood insurance policy may be an important investment.