Business Insurance for Bars

Business insurance is designed to protect a business owner's financial assets and is an essential investment for a bar.

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About General Liability Insurance

All businesses, regardless of industry, face risks that should be covered by insurance. The most common and comprehensive type of policy business owners invest in is general liability insurance (or CGL).

Some of the risks CGL insurance covers are:

  • Bodily injury
  • Property damage
  • Medical payments
  • Legal defense and judgment
  • Personal and advertising injury

While businesses aren't legally required to carry general liability insurance, operating without it is extremely risky. If your business is sued, you could end up facing fees totaling hundreds of thousands of dollars (or more). Having a sufficient CGL policy in place to help compensate for these damages is the only way to prevent this type of event from devastating your business.

Learn more about the risks covered by general liability insurance.


Example 1: As your weekly liquor delivery comes in, the loading dock door malfunctions and crushes the back-end of the delivery truck. Your general liability insurance policy will likely cover the damages to the truck and pay to replace the broken items as well.

Example 2: Your bar features dancing lessons on Wednesday nights for college students. During your first event, one of the dancers slips on some broken glass and falls, seriously injuring her shoulder and elbow. General liability insurance will likely cover her medical bills and any associated legal costs in a lawsuit.

Example 3: While putting away some stage equipment after a live performance, an employee loses control of a large cart. The cart crashes into a group of customers and seriously injures several people in the process. General liability insurance will likely cover their medical costs and any payouts if you settle their complaints out of court.

Of course, this is not an exhaustive list of perils a general liability insurance policy will cover, and some conditions may result in a particular peril not being covered. It's always best to talk to your agent in-depth about the specifics of your policy to avoid blind spots in coverage.

Cost Of General Liability Insurance

On average, bars in America spend between $500 - $1,200 per year for $1 million in general liability coverage.

Check out the chart below for a snapshot of average CGL expenditure across a variety of industries:

Graph showing average price of general liability insurance prices per industry

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • Number of employees
  • Per-occurrence limit
  • General aggregate limit

You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner's policy (BOP) rather than as a standalone policy. A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.

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Other Types Of Coverage Bars Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all bars should obtain:

Workers’ Compensation Insurance

If an employee is injured on the job or falls seriously ill after a work-related incident, workers’ compensation insurance will pay for their medical bills. Additionally, if they are unable to return to work, they may be eligible to receive disability benefits.

Commercial Property Insurance

To keep your bar running smoothly, you rely on a lot of specialty equipment, furniture, tools, computer systems, and inventory. If these items were destroyed in a fire or other incident like a burglary, you could be left to cover the cost of replacing them. However, commercial property insurance will help to pay for these repairs and replacements.

Types Of Coverage Some Bars May Need

In addition to the policies outlined above, there are a few other types of coverage your bar may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.

Business Interruption Insurance

Certain incidents may make it necessary to shut your doors while repairs are made. For example, if a fire breaks out in your bar and destroys the dance floor, you’ll need to close operations down for a couple of weeks. Business interruption insurance can help to cover some of your lost revenue during this downtime.

Commercial Umbrella Insurance

Sometimes a legal claim or accident can exhaust your primary coverage limits. If this happens, you could be stuck having to pay for the additional fees out-of-pocket. Commercial umbrella insurance covers expenses when your primary coverage is exhausted.

Additional Steps To Protect Your Business

Although it’s easy (and essential) to invest in business insurance, it should not be your frontline defense. Yes, insurance will compensate for your business’ financial losses after an incident occurs, but it’s much better to avoid losses altogether.

With this in mind, here are three things you can do to better protect your business:

  • Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
  • Set up a limited liability company (LLC) or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
  • Stay up to date with business licensing.
  • Streamline your business’ internal processes. This will remove unnecessary variables from common tasks and create a safe, consistent environment for conducting business.

Steps After Getting Business Insurance

Depending on where you are in your business building process, here are some other actions you may need to take before getting started:

Frequently Asked Questions

What is included in a business owner’s policy?

A typical business owner's policy includes general liability, business interruption, and property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company's needs.

What is the difference between business insurance and general liability insurance?

"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.

Do I need insurance before I start a business?

You should invest in coverage for your business before your first interaction with a customer. Although the cost of insurance may seem high for a brand new business, it's best to be proactive when it comes to protecting your assets. After all, you can't buy insurance to cover a loss that has already occurred.

Will insurance protect my business from everything?

Not necessarily. Certain exceptions may be written directly into your policy, and some perils may be entirely uninsurable. Be sure to discuss the scope of your policy in-depth with your agent to avoid being blindsided by holes in your coverage.

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