Bar Insurance in Singapore

Real-life claim example: Fire damages The Penny Black bar, Harry’s Bar, and McDonald’s at Boat Quay

In 2016, a fire broke out at The Penny Black Bar, a popular Victorian-style bar/pub in Boat Quay. The fire started in one of the bar’s exhaust ducts. (The exact cause of the fire in the duct was never publicly confirmed, but such duct fires occur frequently due to a build-up of grease from cooking). The fire quickly spread to the bar next door, which was Harry’s Bar. The fire at Harry’s bar then damaged the McDonald’s next door. An employee of The Penny Black Bar also suffered burns on one of his hands.

Such cases demonstrate why a comprehensive Bar Insurance policy is so critical. A fire could start in your bar, and end up severely damaging your precious business premises. A fire could even start in a neighbouring unit, then spread to your bar. You can take all the precautions you want, but if neighbouring businesses aren’t as careful as you are, you could still suffer a great deal of fire damage. There’s a good chance your employees and bar patrons could get injured in such cases.

A Bar Insurance policy includes Commercial Property coverage, Business Interruption coverage, Public Liability coverage, and WICA Insurance coverage. 

Firstly, Commercial Property Insurance would pay to repair your bar from physical damage. This policy would pay for removing fire debris, renovating your bar, repairing fixtures and fittings, and replacing damaged equipment like taps, fridges, and ice makers. It would also cover the cost of replacing alcohol stocks, and other food/beverage inventory. This way, you won’t have to worry about the costs to repair your premises.

Secondly, Business Interruption coverage would compensate you for lost gross profit while your bar is shut down. When businesses suffer calamities, like a fire at their premise, it’s a real double-whammy for the business owner. For bar owners, not only do you have to deal with repairing the premises, you also lose out on sales because you can’t operate your business. It typically takes at least a few months (2-4 months) for your business premises to be cleared of debris, and for renovations to be completed. You also need to seek permission from the relevant authorities before you can be allowed to reopen your bar after a fire. If you’re not properly insured while these repair efforts under going on, you’ll need to cover your overhead expenses out of your own pocket. With Business Interruption Insurance, the insurer would help cover the gross profit that you don’t earn while your bar is being repaired. 

Thirdly, WICA Insurance would cover the costs of medical treatment for your employees. In the case of the Penny Black Bar fire, one of their workers suffered burns. In such a case, WICA Insurance would cover consultation costs with doctors, and treatment costs for the burns. Both the initial consultation and follow-up treatments for the injury would be covered. If the employee had suffered severe burns, WICA Insurance would cover the cost of surgery and hospitalisation as well.

Lastly, Public Liability Insurance would cover you in case third-parties (e.g. customers, members of the public) sue you for causing them injuries, or property damage. In the example we’ve been discussing, no patrons of The Penny Black Bar, Harry’s Bar, or McDonald’s were injured. However, the fact that no one got hurt is really a lucky scenario. If patrons had gotten burnt (like one of the bar’s employees), or suffered smoke inhalation, or tripped and fell while rushing out of the burning bar, they can hold the bar owner liable. If patrons suffer injuries due to your negligence, Public Liability Insurance can cover your legal liabilities. It can pay for lawyer’s fees and legal damages, which can be very costly.