Pub & Restaurant Insurance

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How much Does Pub & Restaurant Insurance cost?

With margins in the food and drinks trade tighter than ever it's crucial that you don't pay over the odds to get adequate but cheap small busines insurance.

At the end of the day, you get what you pay for. Cheapest isn't always best, so diligently research your market before you buy.

You'll find that insurance policies in this sector of the hospitality industry vary widely in terms of:

• the premium you pay
• the level of cover you get
• the excess (how much you pay if you have to make a claim)
• the service

It is difficult therefore to find the average or typical cost, you will need to compare quotes from different ins. cos.. The following is a rough guide to the level of cover to consider taking out.

• Buildings/Catering Unit - insure for the current rebuild or replacement cost, not the market value and where relevant include outbuildings, walls, gates and signage.
  Don't forget rebuilding design costs to meet current regulations.
  Add on site clearance costs and fees to lawyers, architects, surveyors and engineers (usually 10-15% of the rebuild cost).
  If in any doubt, seek out a professional valuation.
• Contents - this included furniture, fixtures, fittings, equipment and stock at the premises.
  Remember that insurers apply what they call the rule of average. This means that if you insure stock for 50% of its real value, they'll only pay out 50% of the claim.
  Insure contents for their current replacement value. Where relevant, add on employees' personal belongings and visitors' effects (up to £1,000 per person) and where relevant guests' belongings and your own household goods and effects.
• Public liability - The legal minimum is £2m. If you have 20+ employees, insure for at least £5 million.
• Employers' liability - The legal minimum is £5m. Some insurers offer twice that.
• Products liability - The legal minimum is £2m but you can extend this to £5 million. Do I need it?
• Business interruption - Work out how much profit you'd lose if your premises were out of action for a year, plus additional expenses (eg hire of alternative premises/catering unit).
• Frozen food - Work out the value of stock that could be written off because of a temperature failure.
• Goods in transit - The maximum value of goods you transport in any one shipment.
• Specified items - The value of equipment you need to cover away from the business premises (eg for outside catering events, meetings).
• VAT - If you aren't registered, exempt or partially exempt, make sure all insured sums are adjusted to include the non-recoverable VAT element.

How to get cheap Pub & Restaurant Insurance

Whether you're running a pub, restaurant, cafe, takeaway or mobile catering van, make your premises as safe as possible to cut premiums and reduce the likelihood of expensive claims by customers and employees

• Make your business premises secure (BS standard locks, intruder alarms, CCTV etc) to prevent break-ins
• Join a trade association to take advantage of discounted insurance premiums
• Where possible, locate your business in an area that's free of flooding and subsidence and with a low crime rate
• Meet all the requirements of the Health and Safety At Work Act
• Carry out a thorough risk assessment of the workplace
• Keep business money in a secured locked safe
• Buy an insurance package where you can pay the annual premium monthly, interest free
• Don't leave premises vacant for long periods
• Don't store stock in basements where it's liable to damp
• If you cut back on stock levels, let your insurer know to take advantage of lower premiums
• Keep premises and mechanical equipment well maintained
• Use premises that are self contained with their own lockable door
• Make sure all exit doors meet minimum security requirements
• Don't operate outside Great Britain, Channel Islands or Isle of Man
• Don't supply products directly or indirectly to the USA or Canada

Risk and Cost increase, if:

• you're located in a high crime area
• you're located in an area that's subject to flooding
• your business is over 10 miles by road from the nearest fire brigade
• your business is near the sea or a seafront promenade (flood risk)
• you offer entertainment (eg dancing, live music)
• you have late opening hours
• you offer outdoor activities and excursions
• you have a high turnover of employees
• you hire a high number of seasonal staff
• you offer self-catering facilities in your inn or restaurant
• you're closed for long periods and no-one lives in the property

For Cheaper Insurance Costs

• Don't use premises with listed building status
• Put a risk management programme in place
• Install CCTV
• Let your insurer know if you take on fewer staff or cut back on stock levels
• Don't offer disco/live entertainments/nightclub facilities
• Don't provide DSS accommodation
• Restrict late night opening to Christmas and New Year
• Don't organise excursions
• Don't offer play facilities (eg Bouncy Castle)
• Make sure the premises are occupied overnight by an employee or family member
• Don't have an ATM (cash machine) on the premises
• Don't charge for admission
• Look for a policy where you can pay premiums monthly, interest free
• Don't extend hours of opening more than three times a week

Join a Club

It's a good idea to join a trade association for discounts on supplies and services, including insurance. Here are details of some of the best known associations in the hospitality sector in the UK.

The British Hospitality Association (BHA)

The BHA is the national trade association for the hospitality industry and represents restaurants, hotels and contract catering units.

Members can save up to 20% on their insurance renewal premium through online broker Stuart Alexander Ltd.

Other member benefits include a free fire survey and 20% off Chubb extinguishers and servicing charges.

Website: www.bha.org.uk

The Restaurant Association (RA)

The trading arm of British Hospitality Association, the RA promotes the interests of all kinds of restaurants, from gastropubs to family-run cafes and motorway services operators.

Their website lists suppliers of goods and services, including insurance providers for hotels, restaurants, pubs, clubs, bars and catering professionals.

Website: www.restaurateursguide.com.

British Beer and Pub Association

The British Beer and Pub Association (BBPA) represents the UK beer and pub sector. Their members make 98% of beer brewed in the UK and own more than half of Britain's 58,000 pubs.

Website: www.beerandpub.com

The British Institute of Innkeepers (BII)

Innkeepers should consider joining the British Institute of Innkeepers (BII), the professional body of the licensed trade.

Among member perks (business advice, subsidised training courses, free helplines on legal issues, health and safety and food hygiene), you qualify for exclusive discounts on pub insurance from their recommended providers.

These include:

• The Bateman Group
• Terry Osborne Insurance Services Ltd
• Marsh Ltd
• Pro Publican Insurance

Website: www.bii.org

Noctis

Set up back in the 1950s, Noctis represents businesses working in the night-time economy - late night bars, live entertainment and music venues, discos, clubs, nightclubs, lapdancing / poledancing venues etc.

As a member you can access practical support on issues such as health and safety as well as savings on insurance through their preferred supplier NDML Ltd.

Website: www.noctisuk.org | NDML Ltd insurance review

Nationwide Caterers Association

The Nationwide Caterers Association (NCASS) offers a wide range of discounted insurance products for independent businesses working in the catering industry.

Website: www.ncass.org.uk | NCA insurance review

Best Bar None

The Best Bar None awards scheme offers a great opportunity for licensed premises to demonstrate their commitment to safety, security and responsible drinking. Acceptance to the scheme could reap rewards in the shape of lower premiums from your insurer.

Website: www.bbnuk.com

Did you know ...?

Some insurers won't even consider you if you employ security staff or charge an entrance fee. Nightclubs or pubs with regular extended hours of opening or licensed premises that charge for admission will pay much higher premiums.

Health and Safety at Work

All owners of pubs, restaurants, cafes, takeaways and mobile catering units must comply with the Health and Safety at Work Act etc Act 1974.

You face a heavy fine or even imprisonment if you don't. You'll also be open to claims from staff and the general public.

Overseen by the Health and Safety Executive (HSE), the aim of the Health and Safety at Work Act is to create a safe working environment in all commercial premises.

Visit the HSE website for useful information and advice on all matters relating to health and safety in the hospitality sector.

You can also phone the HSE INFOLINE on 08701 545500 (fax: 02920 859260).

Another good source of help and advice is your Local Authority Environmental Health Department.