Pub Insurance. Tips for making sure you have the right cover.
This Checklist covers a large area of Taking over a Business , Insurance being a key part. As no two situations are the same, only the basic position is outlined. The answers do not provide a complete or authoritative statement of the law, nor do they constitute legal advice by the author. The information provided is only a snapshot: it does not create a contractual relationship nor does it form part of any other advice, whether paid or free.
When purchasing a pub or taking hold of a lease whether it be for the first time or an addition to a growing portfolio it is important to make sure that you have not only got the correct level of pub insurance but also that the right covers are in place to protect you from a large array of potential claims and ensure that the damage to you business is also kept to a minimum.
Stock
You need to consider what is the most amount of stock you are likely to carry at one time during an average period. (You don’t want to find yourself short of cover should a claim arise).
A lot of pub insurance policies now take into account seasonal increases in stock and give you an uplift at traditional busy times such as Christmas. Check with your broker or provider if your policy includes this or have the option to do so.
Contents
Contents which may also be referred to as fixtures and fittings may be split into office electrical equipment and all other contents such as your tables, chairs, bar, tv screens, kitchen fittings etc. It is simply all the furniture, business equipment and accessories within the building.
When taking out this insurance it is important to make sure that the value you are insuring for will cover all of the contents in the building as in the event of a total loss for example due to a fire all items within the building may be lost.
Buildings
This cover will be needed if you are the owner of the building or your lease contract states you are liable for the building insurance.
The value you need to insure the building for is the rebuild value of the property which is not necessarily the same as the market value. This is the cost of removing any debris from the site, architects/ surveyor’s/ consulting engineer’s fees, material and labour costs. This information is normally acquired when consulting on the mortgage.
Money
Business Money is covering the two different parts of your money; physical cash on the property and non-negotiable money.
Physical money on the property relates to any cash which has been taken during the day and over night, this will normally be split between working hours, in transit and in a bank night safe and over night in a safe on the premises. Non-negotiable money is any card payments which could be lost if there were to be a theft or insured peril.
When thinking about cover for money it is important to remember you may have money stored in a gambling machine, jukebox or in an ATM on the premises as this cover may need to be added to the policy.
Business Interruption
This section is broken down to three subsections;
Automatic cover usually included on all of our pub policies, it will provide you with cover for a loss of gross profit following any loss or damage to the insured. By correctly estimating the expected level of gross profit you will be indemnified for
Accounts receivable, cover for any outstanding debit balances owed to you or owed which cannot be traced following a loss.
Loss of licence will cover your business for any loss of gross profit due to the pub/ business losing its licence under no fault of its own. If you were to serve underage customers and lose your licence as a result this would not be covered. However if the local council decided to re-evaluate your licence due to persistent drink related problems occurring in the area of which you were not entirely to blame, you could be indemnified for a loss of earnings. (Remember all insurance policies are different and to check your cover with your provider if you are unsure about any aspects of your cover).
Public Liability
Pure and simply the most common type of insurance for business’, this protects you from any claims arising in conjunction with injury or accidents that has occurred to any third party or property whilst on your premises. Third parties such as contractors, suppliers and entertainment providers.
Employers Liability
Employers Liability is a legal requirement for any employer of staff. Employers Liability can automatically include cover for any stated employees including temporary staff you will take on at seasonal peaks such as Christmas. Most policies will include this to a standard level of £10million despite the law only really specifying £5 million is required.
