Bar and Restuarant Liability

[SM3434]

I have come across an opportunity in the bar and restaurant industry. While I'm meeting and developing relationships with these business owners, I realized that I have an easy in to review their liability insurance. I have most of my insurance/security licenses, however not my P&C. I'm assuming this is what is needed. Also, what are the average premiums for these types of policies as well as the payouts? I would obviously partner with an agency that has experience in this industry and be looking to share commissions.

Thanks.

 

[Air Jer]

what are the average premiums for these types of policies as well as the payouts?
There is no such thing as an average premium as they are all over the board. What is their sales, payroll, and square footage? Of their sales, how much is food and how much is liquor? If they cook, do they have a UL 300 suppression system or an old dry chem system? Do they own the building or do they lease it? Is it a straight tavern, bar & grill, ma & pa diner, fast food, casual dining or white table cloth restaurant?
What state are you in? Some states have liquor liability laws that increase the liquor liability insurance premium way up. Alabama for instance, puts the owner in a position of strict liability so just coming up with a market is more of the challenge than what is the cost. On the other hand, Minnesota is much more forgiving (what else they gonna do in the winter) of their citizens than some other states so the liquor liability insurance costs can be lower than other states.
This isn't one market niche but several and a lot of variables.

 

[the mayor]

And add in specialty programs that can be hard to beat...both price wise and coverage-wise.

I thought this would be an easy niche ( is there such a thing?) when I got in this business. Found the carriers we had just couldn't get it done in many cases ( even though they all said how great they were and how many restaurants they write in the area).

We just brought on a carrier that I'm having some luck with.

 

[SM3434]

The target market for my side business is getting me in front of bar owners who are typically serving the college to young professional market. Mostly in eastern Pa, nj, nyc. Bars that probably do 80%+ of revenue from alcohol. Not your higher end cocktail/martini/trendy bar/restaurants. More like crowded, loud, probably abnoxious to most, type of bars full of drunken 22 year olds. haha, I stay out of them during these hours.

I'm assuming payouts on this type of business run in the 10-15% range.

Just wondering what the premium range would be and if anyone specializes in this niche.

Asking for an average in this industry was a terrible way to ask a question, I should of known better asking in that manner.

 

[PotentialFarmer]

Hey, we all want to write strip clubs and singles bars so our regular "safety checks" to these businesses are easily explained to the wifes...plus ever tried cross selling to strippers on auto/homeowners? It's a blast. The propositions you get for discounts are amazing!!!

 

[Air Jer]

There are still some variables. Some companies rate the GL based upon square footage but most rate based upon sales. The premium will vary based upon the volume of sales and whether they own or rent their facilities. However, at this juncture, you are merely looking for ballpark figures so here you go. For the package, including liquor liability, a premium of about $3,000 at 15% commission. For the work comp, about $1,000 premium at about 7.5% commission.

 

[Bertolinoins]

Very competitive niche and you need to have a cheap niche program. Those types of bars are not very good at paying their bills either. Reastaurants and Bars are a headache and not very profitable in my experience. Tons of agents and carriers go after them so the margin is very thin.

 

[robtmccarthy]

Very competitive niche and you need to have a cheap niche program. Those types of bars are not very good at paying their bills either. Reastaurants and Bars are a headache and not very profitable in my experience. Tons of agents and carriers go after them so the margin is very thin.

What niche would you recommend?

 

[Bertolinoins]

What niche would you recommend?

I like property. HOA's, Condo Associations, strip malls, apartments, industrial parks, etc. The commission rates and retention ratio's are high and they are low touch between renewals. Getting in tight with the property & association managers takes some work but once you do they send a lot of business your way.

Construction, Trucking, Bar/restaurant, etc is high touch and the commissions are compressed by a lot of competition. You can do a lot of volume in those industries but if you have to service them and worry about profitibility then they are not very attractive. If you are a producer at a large agency with a niche program in those industries and you are only compensated on commssion volume... they are good niche's to chase.