As part of the hospitality industry, whether you own and operate a nightclub, sports bar, live music club, or adult entertainment venue, you need to invest in insurance for the hospitality industry from an agency whose policies cover business property and liability claims, including business interruption and catastrophes. After all, you have a slew of exposures, and if you serve alcohol (as many of you do), your risk factor can go through the roof!
A fire can destroy your establishment in minutes
Most restaurants and bars have a similar issue. Whenever you serve hot food, a fire in the kitchen can spread quite rapidly, consuming the entire building in no time at all. Even if the fire starts at a neighboring storefront in a mall or complex, your business could end up suffering major damage. During the repair period, that whole wing may need to be closed down. In this event, you probably cant continue doing normal business operations while repairs are being made, but fortunately the revenue lost from having to close may be covered by business interruption (BI) insurance.
On the other end of the spectrum, another unforeseen event could occur. You could become the victim of severe water damage if a pipe were to burst on your premises. The result could cause several types of damage; apart from property damage and equipment damage, it could be the cause of food spoiling, and your venue may again have to close its doors for some time.
This is another instance where business interruption coverage would be quite helpful, as it can provide for any revenue lost due to an insured event, depending on the extent of the damage. Some claims can easily run into tens of thousands of dollars, particularly if it ends up taking several months to rebuild the club and replace any damaged equipment.
Aside from BI, there are a number of different types of insurance for the hospitality industry for you to consider when it comes to building and maintaining a strong company. These are two scenarios that could really happen and that can also help you understand the kinds of issues hospitality businesses tend to endure.