Licensees warned insurers may not cover longer hours

Licensees could face more problems insuring their properties when the new Licensing Act comes into force says broker Christie First.

Publicans insuring their properties for building, contents and liability insurance could find their cover withdrawn if they decide to extend their hours.

The financial and insurance agent for the leisure and hospitality sector says some companies are often reluctant to offer insurance to pubs and bars that open late as they consider them to be operating as a nightclub rather than a pub.

These sites are considered to be higher risk and insurers believe they will face bigger claims due to malicious damage related to late-night disorder.

This will come as a blow to licensees who are already facing high insurance costs, which some claim are forcing them out of business.

Insurance companies have been forced to recoup costs following September 11 and the foot-and-mouth crisis by upping premiums on such products as building insurance and employer's liability insurance.

Chris Perry, associate director for Christie First, said: "Most insurers refuse to offer terms on these businesses and, with licensing laws being relaxed, many operators may have great difficulty in obtaining insurance cover.

"A local pub in suburbia that wants to open until 12am on a weekend with a band may face problems. The majority of insurance companies would not be happy to quote for them."

Tony Payne, chief executive of the Federation of Licensed Victuallers' Associations, said: "Some insurance companies will be more difficult than others. Insurance companies need to recognise the difference between a nightclub and a pub.

"Licensees need to make insurance companies aware that they have taken all the right precautions."

Christie First has been working with some of its insurers to overcome this issue before the new Licensing Act becomes law.

"Although certain terms and warranties are placed on these policies, it still means that clients can now obtain a comprehensive commercial insurance package," said Mr Perry. "It should also mean that a landlord will not be prejudiced just because he stays open until 1am on a Friday and Saturday and will be able to obtain quotes instead of having the door shut in their face by brokers."

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