What kind of insurance does my bar in Toronto need?

nightclub and lounge insurance in TorontoAs Toronto grows, so do the various industries supporting it. The hospitality and entertainment industry is clearly no exception. Nightclubs, bars, lounges and resto-lounges each provide a unique experience and have been popping up across Toronto. Neighborhoods in Toronto like Queen Street, Dundas, Ossington and Roncesvalles have seen a surge in these types of establishments, as well as the traditional clubbing district of Toronto. If you currently own a bar, nightclub or lounge or you are a budding entrepreneur looking to open one, you will need insurance. Below is general information regarding bar insurance in Ontario and specifically the City of Toronto.

Coverage to be Considered

  • Liability insurance
    • Liability insurance is the most important insurance that a nightclub or bar needs. Liability insurance covers in the event someone is injured or dies in your establishment.
    • Liability insurance also covers the cost to defend you in court for a claim made against an Insured peril. (a claim which is covered by your policy)
  • Equipment coverage
    • Coverage for the equipment  you need to operate such as cooking equipment, as well as the improvements you have made to the establishment. Coverage is usually for fire but can include theft coverage if you have a monitored alarm system
  • Stock Coverage
    • Covers you for stock such as your food supply and other stock you may have to operate.
  • Legal expense coverage
    • Optional coverage which may cover you in the event of contract or employee disputes

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Risk Assessment Checklist

A risk assessment checklist is a list of  protocols, documents and procedures that a nightclub, bar or any business for that matter should include in the running of their operation.  Because nightclubs, pubs and bars have unique exposures, they require special attention to mitigate claims. Below is a list of just a few items that your establishment should have. Tip: it is a good idea to provide some of these documents to your insurance broker or company when looking for a quotation on insurance.

  • Incident log maintained to record incidents that have occurred. Often times a lawsuit claiming liability can happen up to 2 years after the incident date. This makes keeping logs of situations that can result in law suits an important step in mitigating losses. They should include dates, comprehensive incident details, witnesses and camera footage. It is advised to keep these records for as long as possible.
  • Grievance policy in the event a customer is not satisfied, documented and communicated to all employees
  • A company handbook outlining basic procedures and protocols
  • Procedures in place in the event a patron becomes intoxicated, violent or harassing
  • A food hygiene policy
  • A noise risk assessment
  • Electrical installations inspected by the ESA, especially important in establishments with sound and lighting systems
  • Security system monitored by a central station to protect against property being stolen or vandalized
  • Safe with minimum Class 2 safety rating or ULC TL 15 to prevent theft of cash with proper money handling procedures and protocol for staff that handle money and make deposits
  • Testing of all electrical equipment for safety and proper operating procedures
  • Fire alarm system which is maintained and tested regularly by a certified company
  • If the establishment has a kitchen with deep fryer a certified WET CO2 system inspected semi-annual by a certified company
  • Other policies and procedures as they pertain to your industry, bylaws and other laws and regulations.

Did You Know?

In order to apply for a Boulevard Café Permit in the City of Toronto, you need to have at least $2 million in Commercial General Liability coverage. You must also notify your insurer that you will be operating a patio and what the licensed capacity of the patio is. The City of Toronto also has to be listed as an additional Insured with respect to liability.

Resources Regarding Operation of Bar/Nightclub or Restaurant in Toronto, Ontario