As you educate your clients on the best possible insurance coverage for their bars, it's essential to introduce them to excess liability insurance. Their commercial general liability policy won't always cover the risks of legal disputes, accidents, or issues related to alcohol service when claims exceed the policy's coverage limits. Business owners can use excess coverage to fill the gap in these cases.
While there are common risks to operating any business, those who own bars face challenges that aren't present in other industries. As an insurance agent, you can help your clients identify these risks and the solutions to help mitigate them. Unique risks include:
These liabilities present serious financial and legal concerns to bar owners, who carry a financial and legal responsibility for the actions of patrons who consume alcohol - actions that could result in property damage, injuries, and DUI accidents.
For example, consider the ramifications of serving alcohol to an underage consumer, a minor or other patron driving under the influence after leaving your bar, or a patron falling and experiencing long-term disabilities.
These incidents can lead to claims that well exceed the general liability limits for the bar, as the average payout for a personal injury settlement is $31,000.
Moreover, liquor liabilities often involve many people, making a commercial policy ineffective in addressing multiple claims or expenses related to an incident. Adding excess liability to standard commercial hospitality or bar insurance protects your clients from unexpected and severe financial responsibilities.
Excess liability kicks in when an incident or a claim exhausts the limits of the underlying bar insurance. The excess policy has limits, and when needed to fill an insurance gap, it will cover eligible claims up to the limit.
However, excess coverage can help with more than increased liability limits. Excess coverage can also extend eligibility for coverage.
General liability coverage may have exclusions specific to bar insurance policies and establishments. If your clients know of events that wouldn't receive coverage from their primary policy, it's possible to have these included in underwriting with excess liability coverage. It can address third-party liability, catastrophic claims, and more.
Ensuring your clients fully understand that an excess policy has its own payout limits is crucial. If the limits on both the underlying bar insurance and the excess coverage don't meet the expenses of a claim, the bar pays the remaining financial responsibilities.
When working with clients on their coverage, don't limit your recommendations to higher limits on general commercial liability. Review the concerns and risks bar owners face, and educate them on how excess liability can bridge the gap for more comprehensive insurance protection.
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.
