Pub & Licensed Premises Insurance
Many pubs operate from older or listed buildings that can present additional construction and reinstatement considerations. Much of the licensed estate is Victorian or older, frequently timber framed or listed, with a kitchen added at some point and letting rooms above, and that combination produces both the fire risk and the reinstatement cost.
The trading pattern is the other half. Alcohol, late hours and a crowd create a liability exposure that daytime premises do not have, and common liability exposures include assault allegations, glass injuries and falls on stairs rather than anything to do with the building.
The premises licence can also create a significant business interruption exposure. Where a premises licence is suspended or revoked following an incident, the loss is the trade, not the bricks, and that is a distinct cover rather than part of the property section.
We can advise pub owners, freeholders letting to tenants and operators who own their premises on insuring the building, its accommodation and the trade carried on inside it.
Common claims and risk exposures
The exposures that produce claims in this trade, rather than a generic list.
Old buildings and concealed voids
Timber frames, lath and plaster, chimney breasts and voids between floors let a fire spread out of sight. In a building that has been extended repeatedly over two centuries, nobody is certain where the cavities run until a fire finds them.
Assault and disorder claims
Serving alcohol late brings a liability exposure no other property class on this hub carries. Claims arise from injuries in and immediately outside the premises, from ejections, and from allegations about how door staff acted, and they are defended on records rather than recollection.
The cellar, gas and coolers
Carbon dioxide and mixed gas cylinders, cellar cooling and the lines running from it create a confined space risk and a plant failure risk at once. A cooling failure in warm weather spoils stock; a gas leak in a cellar is a danger to staff.
Kitchens added to a pub
Food has become central to most licensed premises, and the kitchen is frequently an addition to a building that was never designed for one. Extraction runs through an old structure and the same duct cleaning conditions apply as to any restaurant.
Letting rooms above the trade
Where there is accommodation, guests sleep above a business that trades late and cooks. That brings the hotel style questions about detection, escape routes and compartmentation into what the owner thinks of as a pub.
The cover we arrange
We arrange insurance around the property, its use, construction, occupancy and ownership structure. The cover available will depend on the individual risk and the terms offered by insurers.
Buildings
The structure on a reinstatement basis, which on an old or listed pub is considerably higher per square metre than modern construction because of materials, craft trades and consent requirements.
- Reinstatement reflecting age and materials
- Outbuildings, gardens and car park
- Professional fees and debris removal
- Listed building consent where applicable
Public liability
For the operator, the central cover on this class. Injury to customers from falls, glass and disorder, and the cost of defending allegations arising from door supervision and ejections.
- Injury to customers and visitors
- Allegations arising from ejections
- Limits commonly £5m or £10m
- Defence costs and legal representation
Loss of licence
Pays for the loss in value or trade where the premises licence is lost other than by the licensee's own serious default. A cover peculiar to this class, and the one most often overlooked.
- Suspension or revocation of the licence
- Loss of trade and of value
- Excludes the licensee's own misconduct
- Usually a stated sum insured
Stock, including in the cellar
Beer, wines and spirits, with deterioration cover for cellar cooling failure. Stock values fluctuate sharply around events and seasons, so the sum insured needs to reflect the peak rather than the average.
- Wet and dry stock
- Deterioration from cooling failure
- Seasonal peaks covered
- Stock in outbuildings and containers
Business interruption
Gross profit lost while the premises cannot trade. On a pub the indemnity period should reflect that regulars go elsewhere during a long closure and do not all return on the day it reopens.
- Gross profit during closure
- Indemnity period of 24 months or more
- Allowance for rebuilding trade
- Accommodation income where let
What an underwriter will ask
Having these to hand shortens the process considerably, and usually improves the terms.
- Age and construction, whether listed, and whether any part is thatched or timber framed
- Trading hours, particularly any licence beyond midnight
- Whether door supervision is used, and on which nights
- Food offering: none, light, or a full kitchen with frying or grilling
- Extraction and its cleaning regime where a kitchen exists
- Letting rooms: how many, their detection, and the escape route from them
- Cellar arrangements, gas storage and cooling plant maintenance
- Previous claims, split between property damage and liability
What affects the cost of your insurance?
The main factors insurers consider when assessing the premium.
Construction and listing
Age, timber framing, thatch and listed status all raise the reinstatement cost and the rate, because a sympathetic rebuild takes specialist trades and consents that a modern building does not.
Hours and the nature of the trade
A food led pub closing at eleven rates very differently from a late licence with entertainment. The liability element responds more to hours and crowd than the property element does.
Food and extraction
Adding a kitchen moves the risk towards restaurant rating, and frying or grilling moves it further. The cleaning regime is the mitigation insurers look for.
Liability claims history
A record of assault or injury claims affects this class more than property claims do, and it is usually met with a higher liability excess and questions about door supervision rather than a refusal.
Conditions and exclusions to consider
Terms vary between insurers, so treat these as the questions to ask rather than a description of any one policy.
Assault claims where records are absent
Cover responds, but defending an allegation depends on incident logs, CCTV retention and door records. Where none exist, the claim is usually settled rather than defended, and the record follows the premises to renewal.
Duct cleaning and kitchen conditions
Once a pub has a kitchen it carries restaurant conditions. Cleaning intervals, suppression servicing and gas interlock requirements all apply, whatever the building is called.
Licence lost through the licensee's conduct
Loss of licence cover exists for events outside the licensee's serious default. Revocation following persistent breaches, underage sales or failures found at review is generally outside it.
Unoccupied and seasonal closure
A closed pub is an unoccupied commercial building with stock in it. Seasonal closures and periods between tenants need to be notified, and terms then usually carry inspection and drain down conditions.
Common questions
What does loss of licence cover actually pay for?
The loss you suffer if the premises licence is suspended or revoked for reasons outside your own serious misconduct, which can include the fall in the value of the business as well as lost trade. It does not respond where the licence is lost because of persistent breaches or offences by the licensee.
Do we have to use registered door staff?
Where door supervision is required by the licence it must be SIA licensed, and insurers typically ask. Beyond the legal position, the records door staff keep are what makes an assault allegation defensible, so their absence costs more at claim stage than it saves.
The pub is listed. How does that change the insurance?
The sum insured must reflect a like for like reinstatement using appropriate materials and trades, with consent requirements built into the timescale. That raises both the figure and the indemnity period you need for business interruption, because the rebuild will take longer.
We have four letting rooms. Is that still a pub policy?
In many cases, yes, but the accommodation brings its own questions: detection in the rooms, a protected escape route, and your liability to guests and their property. Tell the insurer how many rooms and how they are let, because it changes the fire underwriting rather than just the income.
How do I get a quote from True Risk Solutions?
Call 01304 262880 and speak to a broker, or email info@truerisksolutions.co.uk with what you do, what you need cover for and a phone number with the best time to call, and a broker will call you back. We need a phone number to quote, because the cover and the price depend on questions that are quicker to answer on a call than by email.
Speak to a specialist who understands your industry
Tell us about your business and the work you undertake, and we will come back to you with cover options built around it. Call 01304 262880, or email us with a phone number and the best time to call and a broker will ring you back.