Nightclubs are great places for people to enjoy and dance the night away, however, without good housekeeping practices nightclubs can also be hazardous places to be and work.
As a nightclub owner you need to look after your staff and clientele and make sure you are protected correctly from all eventualities. Below we explore potential exposures to your business…
Property exposures tend to come from any cooking operations that are conducted on the premises. While cooking will likely be limited to microwave and ovens, there may be grills and fryers. These should have automatic fire extinguishing protection, hoods and filters. The kitchen must be kept clean and grease-free to prevent fire spread. Theft can be a major concern if spirits and cigarettes are sold. Spirits should be stored in areas inaccessible to customers.
Business Interruption should be a must for any nightclub owner. Clientele tend to be fairly loyal but will switch after a major loss due to the lag time between the re-opening and the return to full operations.
Crime exposures can be substantial if alcohol and cigarettes are sold. Employee dishonesty normally centres on the stock rather than the money. If there is a substantial amount of cash receipts, irregular bank drops made during busy evenings can be helpful. Closing time is the most vulnerable time; therefore, procedures should be in place to prevent holdups. Criminal background checks are recommended for any employee handling money.
Public liability exposures range from slips, trips and falls from spilt drinks. Because lighting is normally subdued, the insured must mark any change of elevation carefully. All fire exits should be plainly visible from any part of the premises. There should be a set procedure for rapid clean-up of spills. Dance floors should be in good condition with regular maintenance to provide a smooth surface to prevent falls. Any confrontational activity should be documented and witnessed in case of future claims.
The contractual relationship between the entertainment and the management is vital. The contract should be clear as to responsibilities and rights of parties. There should also be a clear understanding of the terms of payment and whether the entertainment is employed or hired.
Employers’ liability exposures come from slips, falls, cuts, burns and heavy and awkward lifting, along with interactions with rowdy customers. As with all retail businesses, hold-ups are possible. Therefore, employees should be trained to respond in a prescribed manner. Well-trained employees with an incentive to do their best and who have clear direction will have the fewest injuries. Company incentives to encourage long-term employment are positive signs of management control. Entertainers are exposed to various hazards based on the performance type. If the owner employs entertainers, there should be a clear determination as to whether they are employees or subcontractors.
Other exposures include goods held in trust for coat check areas where customers may leave their goods to be cared for by nightclub employees or independent contractors. There must be checks and balances in place to ensure that the items are released only to the rightful owner. Another goods held in trust exposure is to the equipment of the musicians who perform at the nightclub. If the items are left overnight, the insured has a responsibility for their safety. There is also a substantial amount of audio-video equipment and other electronic equipment for sound and lighting of the dance floor.
Here at Covered Insurance Solutions we are experts in arranging nightclub insurances and have access to a range of Nightclub specific schemes through a variety of insurers. To review your policy or to obtain a quotation please contact us now on 0345 862 2727 or email email@example.com