General Liability Insurance for Security Guard Company’s Contracts with Bars, Nightclubs and Lounges.

General Liability Insurance for Security Guard Company’s Contracts with Bars, Nightclubs and Lounges.
May 17, 2016 BSGIns

On most general liability insurance policies there is a nightclub, bar and/or lounge exclusion. This means that there is no coverage for any general liability claim brought against a security guard company with this specific work exclusion.

If you’re a security guard company and your general liability policy has bar/nightclub exclusion, you need to find out how the carrier defines what constitutes a bar or nightclub. What if you have a restaurant contract and the restaurant has a bar inside the location? Or a hotel  that has a bar/lounge inside the location? Will the general liability insurance carrier cover claims for these types of locations? The only way to find out if a possible claim will be covered is to confirm with your insurance carrier. Insurance carriers have their own criteria to determine if a particular location is a bar, nightclub or lounge. Do not wait until after a claim is filed to find out if the location you are securing is covered. Have your insurance broker do their research to see if the insurance carrier is classifying it as a bar or nightclub.

If you do obtain a security guard contract with a bar/nightclub there are general liability policies available that will provide coverage for these types of locations. The minimum premiums for the general liability policies that coverage security operations/bouncers at bars is much higher when compared to standard policies. Typically the minimum general liability policy premiums start at $20,000 to $25,000. The range in minimum premium will vary depending on amount of payroll, number of locations, and prior losses. Be aware, most general liability policies that cover bars do have a sub-limit for assault and battery coverage. I have seen the assault and battery sub-limit range between $100,000 to $250,000.

Most security guard companies I speak with are unaware of the additional general liability cost to properly insure the business against claims resulting from work at a bar/nightclub. If incurring the general liability premium cost makes sense, we can obtain quotes from our markets for security guards/bouncers at bars/nightclubs. Once we have the information needed to present to our markets we can begin the quoting process.