Finance: have you got it covered?
Pubs sometimes fall down over not having the right insurance cover for what is an increasingly complex business. Here are the most common issues that licensees fail to address.
Doorstaff
Door supervisors are now commonplace in many towns. Given some of the problems that occurred with an unregulated industry, insurers used to be wary of doorstaff. However, cover is now available in most instances where staff employed are licensed by the Security Industry Authority, as they are required to be by law. If you employ doorstaff make your insurer aware and make sure you have cover.
Entertainment
More publicans now offer entertainment to bring in additional trade. The solo singer on a Saturday night has long been accepted, but DJs and dance floors are still unattractive risks for many insurers. However, if you have entertainment, you need cover.
Late licence
Many licensees have opted to obtain a licence through to 1am and later, even if they don't plan to use it regularly - it saves the need to obtain temporary event notices for special occasions. Late licences are, however, an additional insurance risk, so make sure your broker is informed.
Children's play equipment
In an attempt to make their outdoor areas family-friendly, many licensees have installed children's play equipment. There are regulations surrounding the installation, use and maintenance of such equipment. Are you aware of this? And, just as importantly, is your insurer aware?
ATMs
Cash machines in pubs are a fairly recent innovation and provide an added service for the customer as well as useful additional income for the publican. Inevitably, though, ATMs lead to increased risks because of the cash handling involved and the amount of money held on the premises. Insurers' requirements for ATMs vary significantly. Do your insurers know you have an ATM? And have they amended your cash limits accordingly?
Kitchen equipment
There is a trend for pub food operations to border on being restaurants - with the kitchen equipment to match. This brings its own considerations, from making your insurers are aware you are providing food through to ensuring you have adequate cover for the equipment and that this is properly maintained. A particular area of concern is deep fat fryers and any associated extraction equipment. Most insurance policies lay down conditions on matters such as cleaning and fire extinguishers and so on, and it is vital these are followed. If they aren't, your insurance could be invalid at the time of a claim.
Bed and breakfast
Pubs and inns also have a long history of providing overnight accommodation. If you take on this venture make sure that your insurance provides for it, as not all policies include it as standard. Also, make sure your premises comply with fire regulations.
Seasonal stock
Many licensed premises increase their stock levels at peak times, such as Christmas, and for major sporting events. Most pub policies make some provision for seasonal variations, for instance Christmas and Easter. You will generally be covered for about a 20 per cent increase in stock values at these times. But this may or may not fit your requirements, so make sure you have cover for the periods you need, and that the uplift in stock values is realistic.
Employment law
A raft of employment legislation impacts on all small business - not least the licensed trade - and employers must be aware of their responsibilities and act on them. Make sure you are on top of the legislation - and have commercial legal expenses covered in case you get it wrong.
Special events
Special events at pubs, such as bouncy castles and fireworks, can produce a variety of risks for insurers that can fall well outside the scope of your current policy. All such events should be carefully planned and all necessary approval obtained - whether from the licensing authority or from your insurer. That way, you make sure there will be no unpleasant surprises if something goes wrong.
Richard Cook is business operations manager at insurance broker Swinton Business
