Bar Insurance (2026)

Business insurance helps you keep your business running by covering legal expenses, professional mistakes, and client disputes.

Why Do Bars Need Insurance?

Bars need insurance because accidents can happen on the job, and without coverage, a simple mistake can lead to costly consequences. Imagine a customer accidentally breaking a valuable piece of equipment in your bar. Without general liability insurance, you would be on the hook for repairing or replacing that property.

Then there is the risk of customers getting sick from the beverages or even the food served at your bar, customers and employees slipping and falling in a place where spills are quite common. Now add the risk of intoxicated customers getting into arguments or getting into fights.

Insurance acts as a financial safety net, protecting the business from claims of property damage, bodily injury, or even lawsuits.

What Insurance Do Bars Need?

Owning a bar comes with a unique set of hazards. You are dealing with crowded rooms, slippery floors, and patrons consuming alcohol. These factors increase the chance of accidents, fights, or food safety issues. To keep your business running smoothly, you need a strong safety net.

Here is a guide to the specific types of business insurance policies bar owners should evaluate to protect their livelihood.

Liquor Liability Insurance

This is arguably the most critical coverage for any business that serves alcohol. In many places, it is illegal to operate without it. Liquor liability protects your bar if an intoxicated customer causes damage or injures someone after being served at your establishment.

Example: A customer has too many drinks at your bar and gets into a physical altercation with another guest, causing injuries. This policy helps pay for legal defense and settlements.

Business Owner’s Policy (BOP)

A BOP is a convenient package that bundles general liability and commercial property insurance together. Insurance companies often offer this at a discounted rate compared to buying the policies separately. It handles both lawsuits and physical damage to your location.

Example: A pipe bursts overnight and floods your seating area. A BOP assists with the repair costs and covers lost income while you are closed for repairs.

Workers’ Compensation Insurance

Bar environments can be dangerous for staff. They face risks like cuts from broken glass, back injuries from lifting kegs, or slips on wet floors. Workers’ compensation pays for medical treatment and lost wages if an employee gets hurt on the job. Most states require this coverage as soon as you hire your first employee.

Example: A bartender slices their hand deeply while cutting fruit for garnishes and needs stitches. This insurance covers the emergency room bill and their recovery time.

General Liability Insurance

Think of this as your first line of defense against common accidents. It covers third-party bodily injuries and property damage that occur on your premises. If a customer gets hurt because of your negligence, this policy handles the financial fallout.

Example: A server accidentally spills a tray of drinks on a customer, ruining their expensive coat and causing them to slip. General liability pays for the dry cleaning and any medical costs for the fall.

Employee Dishonesty Coverage

Theft is an unfortunate reality in the hospitality industry. Employee dishonesty coverage is usually part of a crime insurance policy. It reimburses your business if an employee steals money or inventory.

Example: You discover that a shift manager has been taking cash from the register and stealing bottles of high-end whiskey. This policy covers the value of the stolen money and inventory.

Commercial Property Insurance

This policy protects the physical structure of your bar and the contents inside. It covers damages caused by fire, theft, vandalism, and certain weather events. It is essential to know whether you own the building or lease the space.

Example: A lightning strike causes a fire that destroys your kitchen equipment and damages the roof. Commercial property insurance pays to repair the building and replace the ovens.

Umbrella Insurance

Standard policies have financial limits. Umbrella insurance provides extra liability coverage once those primary limits are exhausted. It acts as a final layer of protection against massive lawsuits that could otherwise bankrupt your business.

Example: A customer suffers a severe spinal injury at your bar and sues for $1.5 million. If your general liability policy only covers up to $1 million, umbrella insurance pays the remaining $500,000.

Hired And Non-Owned Auto (HNOA) Insurance

Your business faces liability risks even if you do not own company vehicles. HNOA protects your bar if an employee causes an accident while driving their personal car or a rented vehicle for work tasks. Personal auto policies usually deny claims related to business use.

Example: You run out of ice and send a barback to the store in their own car to buy bags. On the way, they hit a pedestrian. HNOA steps in to cover the liability costs.

Commercial Auto Insurance

If your bar owns a vehicle, such as a van for catering or events, you need commercial auto insurance. It covers damages and medical bills resulting from accidents involving company-owned vehicles.

Example: Your branded delivery van slides on ice and hits a parked car while delivering kegs to an event. This policy pays for the repairs to both vehicles. Bar owners typically pay around $170 per month, or $2,041 annually, for this specific coverage.

Cyber Liability Insurance

Bars are relying more on technology for point-of-sale systems and reservation apps. Cyber insurance helps you recover from data breaches and cyberattacks. It covers legal fees, customer notification costs, and credit monitoring.

Example: A hacker installs malware on your payment system and steals customer credit card numbers. Cyber liability insurance helps manage the legal and technical aftermath.

Business Personal Property (BPP) Insurance

While commercial property covers the building, BPP focuses on movable items. This includes furniture, electronics, inventory, and glassware. It ensures you can replace these vital tools if they are damaged or stolen.

Example: A burglar breaks in and steals your sound system and several cases of liquor. BPP helps cover the cost of replacing these items so you can reopen quickly.

Cheapest Bar Workers’ Compensation Insurance

The cheapest option for Workers’ Compensation insurance is from Cerity, with an estimated annual cost of $1,380.

Note: These estimates are based on industry data for small bars with a limited payroll. Actual premiums will vary significantly based on your total payroll, state-specific rates, and your business’s claims history.

Cheapest Bar General Liability Insurance

The cheapest option for General Liability insurance is offered by NEXT Insurance, with policies starting at $1,030 per year.

Note: These estimates are based on industry data for a small bar with standard liability limits. Actual premiums will vary based on your bar’s location, annual revenue, safety protocols, and desired coverage limits.

Cheapest Bar Business Owner’s Policy

The cheapest option for a Business Owner’s Policy (BOP) is from Progressive, with an estimated annual cost of $2,580.

Note: These estimates are based on industry data for a small bar bundling General Liability and Commercial Property. Actual premiums will vary based on the value of your property and equipment, your building’s location and age, and your liability limits.

How Much Does Bar Insurance Cost?

Bars pay an average of $229 per month for general liability insurance, though liquor liability often adds to this premium. For small bars with no employees, rates often fall at the lower end of that range.

However, if you operate a growing bar with multiple employees, use vehicles for work, or require additional coverages like workers’ comp or commercial property insurance, your premiums could be higher, sometimes exceeding $3,000 annually.

Several factors influence the cost of coverage, including your business location, the number of employees, the types of services you offer (like serving food too), and your claims history.

Insurers also consider the amount of coverage you choose and whether you package policies together. While it may be tempting to go with the cheapest option, it’s important to choose a plan that truly protects your business from its most likely risks.

Note: These figures are estimates based on general industry averages. Your actual premium will vary based on several factors, including your bar’s location, annual revenue, number of employees, claims history, and the specific coverage limits you select.

How Is Your Bar Insurance Cost Calculated?

Insurers review several specific details to decide your premium. They focus on how risky your establishment is to insure. One major factor is the scale of your business. A bar with a large staff will usually face higher costs than a place run by a single owner. Your total revenue matters too. High alcohol sales often lead to higher rates for liquor liability coverage.

Your physical location is also important. Prices change based on your state and city. If your bar is in a neighborhood with frequent crime, your rate will likely go up. Past behavior counts as well. Companies look at your claims history to see if you have filed reports before. Other factors include the value of your equipment, the use of company vehicles, and the specific coverage limits you select.