Risky business

The smoking ban will undoubtedly have a large number of knock-on effects on pubs - and some that licensees may not even have considered yet.

Insurance premiums could be one. Some are suggesting that rates could be lowered when customers are forced to traipse outside to light up. No longer will the threat of a still-lit cigarette inside a pub at the end of the night be an issue.

Licensees will, of course, still have to check the outdoor areas of their pub to make sure fags have been stubbed out properly, but the risks may not be as great.

However, others are playing down the effect that the ban will have on insurance costs.

Reduced risk?​

Dominic MacMahon, director of FMW Risk Services, is among those claiming that fire risks will be reduced. He argues that the July 1 legislation will have a significant impact in terms of insurance costs.

"Obviously the smoking ban has huge implications for the licensed trade, but this is one area that has a silver lining for pubs," he says.

"By banning smoking, pubs will become less of a fire risk. Most fires in pubs are started by cigarettes that haven't been extinguished and with no cigarettes pubs are less of a risk."

Dominic says his company has already reduced its rates on the basis that some pubs are going smoke-free before the ban.

"We went to our underwriters and explained the situation and they agreed to look at the rates," he explains. "Other underwriters should come out and make their position clear on this issue."

He also highlights thatched pubs as being the ones with most to gain in the potential reduction of premiums - although he does point out that thatched pubs are often more likely to have open fireplaces, which can increase the risk.

Extra risk? ​

Some companies, though, are holding fire when it comes to making any such predictions around potential dangers. Indeed, Norwich Union is even suggesting that risks may be increased once the ban kicks in.

Allister Smith, the company's property risk manager, believes a reduction in premiums will not generally be the case. "When you introduce a blanket ban it needs to be properly managed by the business," he says. "We have experience of blanket bans that have pushed smoking underground. It can lead to surreptitious smoking in toilets which can actually increase the risk."

Allister also highlights the potential problems once customers are forced outside for a nicotine hit.

"In the past where businesses have introduced a smoking ban, we have found it has posed other fire risks, with cigarettes being placed in bins.

"Pubs need to look carefully at whether they have set up a safe area where staff and customers can smoke," he says.

"Publicans also need to be aware of the new risks that will face them once smokers are going outside to smoke. Time will tell. It's easy to overlook but things need to be properly managed outside the building and adjacent to the building."

Brian Butler, an agent for insurance firm NFU Mutual, also regards smoking as little threat to pubs. In his experience, faulty electrics, dirty flues in kitchens and arson are seen as much greater risks to pubs.

"Smoking does not register as a fire risk. Incidents are very rare in pubs," he says.

So opinion appears to be mixed over whether licensees can bag themselves a better insurance deal.

Though risks may be slightly reduced indoors there is a feeling that new threats exist outside. As such, it may just be a case of wait and see as the ban kicks in, and underwriters are given a chance to gauge the risks.