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There are 68,447 businesses in the Bars & Nightclubs Industry in the US. This number has grown at a CAGR of 2.2 % between 2020 and 2025. And over the next five years, it is expected to continue to thrive.
If you're considering adding to the growth of this niche by opening a bar, pub, nightclub, or tavern, then you need to consider business insurance—specifically bar insurance. Bar insurance includes coverage for alcohol-related incidents, as well as employee accidents, customer injuries, property damage, theft, and more.
This type of insurance is mandatory in most states for bars and other nightspots serving alcohol. Additionally, it is highly beneficial to your business, offering you financial security when the unexpected happens.
Types of Insurance Coverage for Bars
Commercial Property Insurance
Protects your property and its contents from theft, fire, vandalism, and weather damage. This policy covers your furniture, equipment, inventory, and more.
General Liability Insurance
Protects other people's property. Covers if your business accidentally causes property damage or bodily harm. For example, a customer trips on a cracked floorboard, breaks their expensive heels, and sues you for the incident.
Business Owners Policy (BOP)
This policy features a combination of coverages, such as General Liability Insurance and Commercial Property Insurance. Business Interruption Insurance is also commonly added to this policy—it reimburses losses if your business has a temporary closure.
"When our pub had to close for a few days due to a pipe burst, it was a stressful situation (to say the least). However, because we had the right coverage in place, we were able to put a claim in for lost revenue during that downtime. The financial support we received not only covered our expenses during the closure, but also helped us get back on our feet." – Donna J.
Liquor Liability Insurance
Protects your business from accidents caused by intoxicated customers. This coverage is essential as it is often required to get a liquor license.
Workers' Compensation Insurance
Legally required in most states for bars with a certain number of employees. If an employee gets hurt on the job, it covers their medical care, medical bills, lost wages, and disability.
Food Spoilage & Food Contamination Coverage
If your venue also serves food, you should consider this coverage. It covers replacement costs if food goes bad due to a power outage, appliance failure, etc. It also assists with expenses associated with a foodborne illness outbreak, such as medical testing and equipment cleaning.
Cyber Insurance
Cyber Insurance is worth considering if you're storing customer information digitally, such as for an email list. It covers the costs associated with a cyberattack or data breach. This includes, but isn't limited to, hiring a public relations firm for damage control, legal expenses, contacting customers, and more.
How to Obtain Insurance for Your Bar
Getting insurance for your bar is quick, easy, and can be done online in under 24 hours.
1. Apply for Your Bar Insurance Quote
Fill out an online insurance application. This one-page form gives us an idea of your operations so we can provide you custom insurance package options that suit your needs.
To fill out the application, you will need to know your:
- Business Information: Name, start year, description of operations.
- Federal EIN
- Contact Information
2. Purchase Your Insurance Policy
Check your inbox for an email containing insurance options for your bar. Ready to purchase? Follow the instructions to buy your insurance online. Once your payment clears, you will receive your Certificate of Insurance.
If you want to customize your insurance policy further or have any questions, don't hesitate to call one of our insurance agents at 888-592-6631.
"As a nightclub owner, getting the right insurance was one of my top priorities before opening. And I couldn't be happier with JW Surety. They really understood the unique challenges that come with running a nightlife venue and gave me options that suited my business. While I'm hopeful I will never have to use my insurance, it gives me peace of mind to know I'm properly protected." – Dave T.
How Much Does Bar Insurance Cost?
Bar insurance can cost as little as $400 monthly to over $40,000. It heavily varies as every business is unique. Factors that will affect your bar insurance costs include:
- What you want covered (types of coverage)
- How much coverage you need (coverage limits)
- Number of employees
- The state your business is located
- Business structure and operations
- Revenue
- Past insurance claims
- Business experience
Liquor Liability Insurance often accounts for a good portion of a small bar's insurance costs. This policy costs an average of $200 monthly.
Tip: Most insurance providers offer the option to pay your policy monthly or yearly. Yearly policies tend to be cheaper, saving you money.
Benefits of Bar Insurance
Legal Coverage
From bodily injuries due to bar fights to property damage caused by an intoxicated customer—these are just some of the risks involved in running a bar. Incidents like these can land your company in expensive legal trouble. Insurance financially helps you if you encounter an unfortunate event or accident that results in a claim or a lawsuit.
Employee Protection
Say an employee slips on a spilled drink and sprains their ankle. In this case, they can't work for a while and lose out on wages. Insurance such as Workers Compensation can cover their lost wages.
Food Spoilage Coverage
If you're adding food to your business model, then getting covered against food spoilage can save you a lot of money. Without insurance, you are responsible for footing the bill if food spoils due to a power outage or freezer malfunction. With average food costs being up over 20% since 2019, this can be a costly endeavor.
Property Damage Reimbursement
Intoxicated patrons are unpredictable and likely candidates to cause property damage. When this does happen, insurance can help you cover repair or replacement costs for fixtures, furniture, equipment, and more.
Compliance with Laws
Most states require bars to carry Liquor Liability Insurance. In some locations, this is a prerequisite for getting a liquor license. Other types of insurance, such as General Liability, are also commonly mandated by State Laws.
Frequently Asked Questions about Bar Insurance
How can I minimize liability risks in my bar?
To minimize liability risks in your bar, you want to ensure you have adequate insurance. Additionally, you should have a well-trained staff, have security in place, and make sure you are up to date on repairs.
- Bar staff should be trained to identify intoxication levels, ID customers, and maintain a clean environment.
- Security measures such as visible security guards and cameras are invaluable to reduce liabilities and risks.
- Repairs should be done regularly to minimize the risk of injury to staff and patrons.
Does bar insurance cover outdoor seating areas or patios?
Yes, most insurers will extend your insurance coverage to outdoor spaces, such as patios. If your current insurance policy does not include this, talk to an insurance agent about adding outdoor drinking and dining coverage.
What happens if my bar operates without insurance?
If you operate a bar without insurance, chances are you will be shut down, and you could face fines and charges. Furthermore, you can be held personally liable for any injuries that occur to patrons or employees while operating uninsured.
Most states require bars to hold insurance as they are considered "high risk" establishments due to alcohol consumption. Check your state laws to find the type of insurance and the insurance limits that your bar needs.
Sources
2025 State of the Restaurant Industry. (n.d.). In NRA. Retrieved February 28, 2025, from
https://restaurant.org/research-and-media/research/research-reports/state-of-the-industry
Commercial & Business Insurance Guide. (n.d.). In JW Surety Bonds. Retrieved February 28, 2025, from
https://www.jwsuretybonds.com/business-insurance
IBISWorld Inc. (n.d.). Bars & Nightclubs in the US - Market Research Report (2015-2030). In www.ibisworld.com. Retrieved February 28, 2025, from
https://www.ibisworld.com/united-states/industry/bars-nightclubs/1685