Protecting Your LGBT bar or Nightclub with Business Liability Insurance

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Owning and operating a small business comes with plenty of responsibility and accountability

. Even if you operate with the utmost care and provide the best quality and services, a customer can perceive you did them wrong. Is your business protected with liability insurance? Learn what all successful LGBT bar and club owners know about small business liability insurance.

Who Needs Business Liability Insurance?

Over 78% of all U.S. businesses are structured as a partnership or sole proprietorship, according to Bizstats.com. For the majority of small business owners, this form of ownership puts your business and personal liabilities at risk. Owning business liability insurance protects both your business and personal life from financial ruin.

A common misconception of a limited liability company (LLC) or an incorporated company is a business owner is protected from personal liability and liability insurance is not necessary. You can be personally liable if:

you have signed a personal guarantee for a loan

personally you have injured someone

you have acted in an irresponsible or illegal manner

you do not operate your business as a separate entity

What is Business Liability Insurance?

Business liability insurance protects your bar or nightclub in the event of a lawsuit for personal injury or property damages. It will usually cover the damages from a lawsuit along with the legal costs. Depending on the classification of your venue, liability insurance can be purchased in many forms.

What are the General Categories of Coverage?

Business insurance is a broad description that can be broken down into a list of nine types of insurance policies.

Casualty Insurance

Some insurers will lump property and casualty insurance together and refer to the coverage as property and casualty insurance. In fact, packaged policies of property and casualty are often the best purchase a business owner can make.

Property Insurance

Property insurance insures against loss or damage to the location of the business and its contents. It can also insure the property of others in your control when the loss occurs. Property insurance can be for a specific risk. For example, a fire insurance policy insures only against a fire loss to the location. A tornado is not a fire and, therefore, that loss would not be covered. The insured location can be owned, leased or rented.

Liability Insurance

Liability insurance insures against liability legally imposed upon your business because of the negligence of the business or its employees. Put another way, it protects your business if your business is sued for negligence.

Commercial Auto

Your personal automobile policy does NOT cover vehicles used by your business. If your business uses vehicles or anything that is required to be titled by your state, then you need a commercial auto policy. Commercial auto coverage insures against property damage to vehicles and damage caused to others by those vehicles.

Workers Compensation

You will need to insure your employees against on-the-job injuries. Every state is different. But, most states have put into place some form of workers' compensation system. Workers' compensation is a system where the employee is not allowed, by statute, to sue their employer for on-the-job injuries; but, in return, the employer must participate in a system that provides nearly automatic payment to the employee in case of injury for medical bills and damages. There are many options for workers' compensation coverage. Some states allow an employer to opt-out of the system if the employer is self insured, some run the system through private insurers while others use state agencies.

Business Interruption

Business interruption insurance insures against loss or damage to the cash flow and profit of a bar or nightclub caused by the business being unable to operate because of interruption. The easiest example is to think about your business being struck by lightning. The repairs to the building may be covered by other coverage such as property or casualty insurance. But, if you can reopen to for business three months, than there is no replacement of that income without this coverage.

Health Insurance

To be competitive, most businesses need to offer their workers health insurance. This insurance offers a health coverage benefit to employees (and the business owner).

Life and Disability Insurance

Life and disability insurance protects the business against the death or disability of key employees. For example, one partner carries a life insurance policy naming the partnership as a beneficiary. If that partner dies, and the business has planned properly, the proceeds of the policy can be used by the business to buy out the share of the decedent's partnership interest from the estate.

Protecting Your LGBT bar or Nightclub with Business Liability Insurance

By: Harry Smith

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