What Insurance Do Toronto Bars and Pubs Need

What Insurance Do Toronto Bars and Pubs Need?

June 20, 2024 / 5 mins read

When you or your staff serve alcohol to customers at your bar or pub, there are always risks. You need to protect your Toronto bar or pub from liquor liability claims that allege third-party bodily injury or property damage as part of your customized bar insurance.

Liquor liability insurance for your Toronto bar, pub, lounge, or tavern is essential insurance coverage that you need when you are serving customers alcohol.

If you own a bar or pub in Toronto, Greater Toronto Area (GTA) or anywhere in Ontario, your Western Financial Group business insurance expert will give you top commercial insurance advice for your establishment and at the right value for you.

What is Toronto bar and pub insurance?

Toronto bar and pub insurance is a package coverages that protect your licensed establishment. Liquor liability insurance is an essential part of your Toronto bar insurance. Without it, you could potentially face lawsuits or third-party liability claims should one of your customers get injured, injure someone else, or damage property after getting intoxicated in your establishment.

How much does Toronto bar and pub insurance cost?

There isn’t a one-size-fits-all price for Toronto bar and pub insurance.

Factors that will determine the cost of your bar insurance are:

  • Years of experience
  • Location of your bar, pub, tavern, or lounge
  • What types of alcoholic drinks are served
  • Percentage of annual revenue from selling alcohol
  • Equipment on premises
  • Number of employees
  • Any past insurance claims

As a Toronto pub, bar, or tavern owner, here’s how insurance protects you from risks associated with your establishment:

  1. A patron trips on a cord near the bar. She has a concussion and has fractured her wrist. She then decides to sue. Your commercial general liability insurance can help pay for her medical expenses and your legal fees.
  2. A customer has left your pub and then hits another car while pulling out of his parking spot. Alcohol is determined to be a major factor in the accident. Your bar gets sued. The liquor liability insurance that your bar carries may help cover your legal fees to defend yourself and the customer’s medical expenses.
  3. Your bar’s client list and their credit card information is hacked by cyber thieves. Your cyber liability insurance can help cover the costs associated with repairing your computer system and any legal fees.

An insurance package for Toronto bars and pubs usually includes these insurance coverages:

Liquor liability insurance

Liquor liability coverage helps cover the costs associated with claims against your bar or pub that allege third-party bodily injury or property damage due to an intoxicated customer.

As the bar owner, you could be held responsible for losses, damages, or other expenses arising from third-party bodily injuries, deaths, or damage to another person’s property resulting from an accident or incident if the alcohol you served to one of your customers is considered to be a contributing factor.

Liquor liability coverage typically includes financial support to cover court awards made against you and to cover legal fees caused by an intoxicated person to whom you served alcohol. It covers your legal expenses up to your policy’s limit.

Your employees must be licensed to serve alcohol by provincial liquor service and sales programs such as Smart Serve in Ontario. This includes anyone who serves, handles, or sells alcohol and it also includes your security staff.

Commercial general liability (CGL) insurance: This type of insurance helps protect your bar or pub from a loss if you’re found legally liable for bodily injuries or property damage to a customer/supplier.

CGL can help pay legal and medical costs if a customer is injured at your restaurant; for example, they slip on wet floor or on an icy patch on your bar’s sidewalk.

Without commercial liability insurance, you would be responsible for paying any liability costs on your own.

Your CGL coverage also can help protect you from libel, slander, copyright infringement, and false advertising allegations.

How much CGL insurance do I need?

It’s not uncommon that your Toronto bar would carry a minimum of $2 million in CGL coverage and more depending on the size of your bar and its alcohol sales.

Commercial building and contents insurance

Commercial property insurance helps protect your Toronto bar from unexpected events like fire, theft, or vandalism. It's not just the physical structure that's protected, but everything inside and out that keeps your restaurant running smoothly.

Cyber insurance: If you process debit and credit card transactions, you need cyber insurance. Your system could be vulnerable to cyberthieves.

Without cyber insurance, you will have to pay out of your pocket for the cost of restoring your system if it’s hacked.

You may also be liable for damages to third parties whose information has been stolen and you may have to pay for notification expenses to inform customers affected by a breach.

Equipment breakdown insurance: Your Toronto bar or pub likely has expensive electrical and mechanical equipment to keep your products either frozen or refrigerated.

This type of insurance provides coverage for property damage from the sudden and accidental breakdown of insured equipment not automatically covered by a standard commercial property policy.

Product liability insurance: If you serve food at your Toronto pub and a customer gets sick after eating your food, product liability insurance can help cover the cost of the customer’s medical expenses and your legal and court-related costs to defend yourself.

Commercial auto insurance: If you have a business car, van, or truck that you use for your bar or pub, it won’t be covered by your personal car insurance policy. You will need commercial coverage as part of your insurance package.

Business interruption insurance

This type of insurance supports you when your Toronto bar can’t operate due to a covered loss, such as a fire.

There are a number of losses that can force your business to shut down. Some examples are:

  • Damage to your equipment from fire or vandalism
  • A major reduction in revenue due to a client/supplier facing losses of their own
  • A disruption in your supply chain

Business interruption insurance can help with these expenses:

  • Payroll
  • Rent
  • Utilities
  • Property taxes
  • Alarm monitoring
  • Relocation of your business

Do you know about Western’s Hospitality Insurance Program (HIP)? The Hospitality Insurance Program partners with Canadian hospitality associations to provide Commercial Insurance and Employee Benefits solutions tailored to the unique needs of hotels, motels, bars, and liquor stores.

What do I do if I have a claim against my Toronto bar or pub?

  • Contact your broker immediately after any business-related mishap. Waiting to file a claim can confuse insurers about the severity of the damages to your business.
  • Know your policy so that when you contact your broker you are familiar with what will be covered or not.
  • Document the damage. Take photos right away and write down what happened.
  • Do not throw away damaged goods after taking photos. Keep the physical evidence so that your adjustor can see it.
  • Do not invite lawsuits. Don’t say anything that could be used against you, especially if you aren’t sure what happened.
  • Be honest about what your damaged property is worth. Damaged commercial property is generally valued according to its actual cash value or replacement value.

Here’s an insurance checklist:

  • Do you have the best Toronto business insurance rate that suits your work?
  • Do you have the right amount for your deductible and regularly review it to make sure it’s the right amount for you?
  • Are you or your employees using personal vehicles for work?

Western Financial Group has licensed BUSINESS INSURANCE EXPERTS to get you the best insurance coverage as a Toronto bar or pub owner. Our experts are available now to help you navigate the business insurance journey to protect your Toronto business.

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