Why Restaurants, Bars, Taverns & Nightclubs Need Excess Insurance

Economic and social inflation, litigation funding, and other factors continue at full throttle in 2023, driving up liability exposure for businesses, including establishments in the hospitality industry. Additionally, other factors such as rising medical expenses and legal and investigative costs contribute to driving up claims costs.

To protect against liability exposures and increasingly higher verdicts and settlements, it’s critical for Restaurant, Bars, Taverns & Nightclubs (RBTNs) to carry Excess insurance. We’ve put together several reasons why clients should carry Excess coverage for you to share with them.

1. Increased asset protection: RBTNs often face higher liability exposures due to the nature of their operations, such as serving alcohol, food preparation, and customer interactions. Excess insurance provides an additional layer of protection beyond the limits of primary liability policies, such as General Liability and Liquor Liability insurance.
2. Assistance with legal defense costs: Even if a claim is found to be meritless, legal defense costs could be significant. Excess insurance can help cover these defense costs, enabling firms to defend themselves against allegations without financial burden.
3. Additional limits for liquor liability exposure: Serving alcohol can significantly increase the potential for liability claims for RBTNs. Dram shop laws in many states place the blame for damages caused by intoxicated individuals on the establishment that served them. In a jurisdiction with dram shop laws, a business may be liable for damages if a drunk customer fights with another customer, damages someone else’s property, or causes a car accident – even if the incident occurs elsewhere. Excess insurance can provide additional limits in the event of alcohol-related incidents, such as bar fights or vehicular accidents involving intoxicated customers or allegations of overserving by the establishment.
4. Protection for high-traffic events: RBTNs often host events, parties, and gatherings with large crowds. These events can lead to an increased risk of accidents or incidents, making Excess coverage integral in helping to manage potentially large claims.
5. Enhanced reputation management: A liability claim or lawsuit might negatively impact the reputation of a restaurant or nightclub. Having Excess coverage demonstrates the establishment’s financial responsibility.
6. Meeting contract requirements: Before awarding an event to a restaurant or bar, some venues or event organizers may require businesses to carry a certain amount of Excess liability coverage. This coverage can assist businesses in securing significant relationships and opportunities.

Excess Insurance for Everything with ISC

We specialize in insuring RBTNs, providing a complete package of coverages including General Liability, Assault & Battery, Liquor Liability and Property insurance. We also offer Excess insurance up to $5 million for RBTNs and hotels and motels. Excess coverage for RBTNs is available in all states. Email submissions to excess@iscmga.com.

*NOTE: The insuring agreement in a policy sets out the covered perils, assumed risks, and nature of coverage that the insurance company provides to its insured in exchange for the premiums paid. Thus, the terms and conditions of the policy will dictate whether coverage exists and the nature of any potential benefits.