3.No exit zone: A lighted exit sign
malfunctioning or an exit door being
blocked or locked to prevent patrons
from entering the bar is common. This
risk shouldn’t be underestimated. If
there was ever a fire in a nightclub and
patrons were unable to exit, the claims
for bodily injuries and property damage
might easily exceed the aggregate limits
of a standard $2 million dollar policy.
This risk is easily avoided by proper
maintenance of the bar premises and
awareness of this potential for risk.
4. Flammable Decorations: Like the no
exit zone exposure, flammable decora-
tions or patron injuries caused by servers
accidentally spilling hot food or bever-
ages can also be disastrous for establish-
ment owners who don’t carry adequate
limits. Burns are painful and cause dis-
figurement, so in addition to the special
damages associated with the cost of acute
and future medical treatment of burn
injuries, damages awarded by juries for
pain and suffering also tend to be high.
Bar owners are wise to consider an insur-
ance company that conducts loss control
inspections as part of their underwriting
process. Trained loss control profession-
als can't prevent every risk scenario, but
they can spot a great number of potential
problem areas and will make recommen-
dations for correction that can stop a loss
before it occurs. Bar owners should note
that underwriting inspections are not
comprehensive safety evaluations and
may want to consider utilizing their lo-
cal fire departments to inspect the bar for
hidden fire hazards.
5. Fake Out: Try as an owner will, under-
age patrons with convincing fake I.D.s
will enter bars. Bar owners should con-
sider investing in I.D. scanners to help
identify false documents because the re-
sponsibility for a patron engaging in un-
derage drinking remains with the serving
establishment even after the patron has
left the premises.
Even with the best mitigation efforts,
preventing loss isn’t always possible. But
where best efforts fail, insurance policies
customized to provide adequate coverage
and sufficient limits succeed in affording
the protection needed to give the dram
shop owner peace-of-mind, so he or she
can get back to the busy business of running a bar.
As a vice president and the primary
casualty department manager for
Golden Bear Insurance Company,
based in Stockton, Calif., Kenneth King’s
primary responsibilities include the
Primary Casualty and Personal Lines
departments. He is also the A.I./C.P.C.U.
exam administrator for the company.
Prior to joining Golden Bear in 2000,
Ken worked for CNA Insurance, Unigard
Insurance and General Accident.
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