The hospitality industry is constantly evolving, and bars and taverns are no exception. With the rise of craft cocktails, locally sourced ingredients, and experiential dining, today’s bars face a more complex operational landscape than ever before. These innovations create new opportunities but also present new risks. As such, bar and tavern insurance products must evolve in step with these trends to ensure that businesses in the hospitality sector have adequate protection and can continue to grow.
The bar and tavern industry has seen significant shifts in recent years, with several key trends shaping the future of operations.
The rise of on-site brewing and distilling is driving the craft beverage movement. After all, it’s not far-fetched to think that the best beer makers would know a thing or two about distilling spirits. As Bill Owens, founder of the American Distilling Institute, puts it, the world’s best whiskey is apt to come from the people who brew their own beer.
While this trend adds a unique appeal to bars, it also introduces new risks associated with specialized equipment and the brewing process itself. Bars must be prepared for potential hazards like equipment malfunctions or accidents, which require tailored insurance solutions.
With the growing use of technology in order management and customer interactions, bars are increasingly exposed to cyber liability risks. POS and table management systems, mobile ordering and online reservations, inventory and customer data management, and other tech solutions are essential to operations today. However, they also open the door to potential cyberattacks, necessitating robust cyber liability coverage.
Bars are no longer just places to grab a drink. Many now focus heavily on the customer experience, offering live entertainment, augmented and virtual reality experiences, dining, and even retail options. These additional services come with unique risks, such as injuries during live events or liability for alcohol-related incidents during interactive mixology classes.
These trends are transforming the industry, and insurance agents must stay ahead of the curve by adapting their policies to these new operational realities. As bars, pubs, and taverns continue to innovate, they encounter new insurance challenges that require specialized bar and tavern insurance coverages such as those below.
As bars expand their offerings to include live events and interactive experiences, they expose themselves to greater liability. For instance, injuries at live music performances or accidents during cocktail-making classes can lead to costly lawsuits if businesses are not properly insured.
The increasing reliance on digital technologies presents another layer of risk. Data breaches, system hacks, or other cyber threats can leave bars liable for stolen customer data, underscoring the need for specialized cyber liability insurance.
With the rise of craft cocktails and unique food offerings, bars face potential liability for the products they serve. If a patron becomes ill from a drink or meal or if a product-related injury occurs, the bar could be held accountable. Completed operations liability covers issues that may arise even after the service is provided.
With bars and taverns engaging in more diverse and higher-risk activities, their liability exposure often exceeds standard coverage limits. For example, consider the case of one bar in Texas slapped with a $301 billion verdict after overserving alcohol to a customer.
In cases of severe accidents, lawsuits, or large-scale data breaches, businesses may need excess liability insurance to protect them from the financial fallout. This coverage extends beyond traditional limits to ensure comprehensive protection against larger claims.
To ensure bars and taverns are fully covered in this evolving landscape, insurance agents need to adapt their product offerings. As businesses expand into live entertainment and interactive experiences, liability insurance must evolve to cover these new risks. Coverage may need to include alcohol-related incidents, injuries during events, and any other liabilities that arise from new customer experiences.
Additionally, with the increasing digitalization of the bar industry, having a strong cyber liability policy is crucial. Such policies should cover everything from data breaches to cyberattacks, safeguarding businesses from the financial and reputational damage these incidents can cause.
As bars and taverns continue to push the boundaries of traditional hospitality, the insurance industry must keep pace. By staying informed about emerging trends, insurance agents can develop relevant, comprehensive coverage solutions that support innovation while managing risk.
The future of hospitality insurance lies in proactively addressing these trends and ensuring that businesses are well-equipped to handle the challenges and opportunities of the modern hospitality landscape.
Contact us at RMS Hospitality Group to learn more about how we can help you offer the right insurance solutions for your clients.
At RMS Hospitality Group, our expertly crafted policies are written specifically for the hospitality industry. We offer custom-tailored solutions to meet any venue’s specific needs. For more information, contact our knowledgeable experts today at (888) 359-8390.
At RMS and associated firms, business continues as usual. Our staff is remote-capable and available to handle all partners, brokers, and insureds at the present time.
