Why Publicans Need to Put Their Insurance House In Order

Running a pub is a challenging task these days.  Figures show that one pub closes every 12 hours and that’s not just because the bell has been rung on last orders.  Various factors have created economic uncertainty, but there are also other pitfalls waiting to catch out a pub that lacks the right insurance safety net.

Landlords and their staff have always had the issue of getting it right when it comes to not serving underage drinkers – a crime with an unlimited fine attached to it – but there are other tricky things to negotiate, such as food safety and not employing illegal workers.  All three areas named can lead to a publican being fined, but sometimes there is an additional threat of a custodial sentence if the law is breached, with sentencing having become much tougher since 2016.

Corners simply cannot be cut and all hospitality businesses need to protect themselves through relevant insurance covers, whether that is a matter of safeguarding against food or fire regulation breaches – or something else.  Employee rights is another area full of pitfalls and allergen laws have been very much in the spotlight, due to the recent publicity surrounding ‘Natasha’s Law’.

Publicans owe a duty of care to both staff and customers and must have safe systems in place, backed by thorough risk and fire assessments.  It is often the unusual – that which may not have been on a previous risk assessment – that can catch people out, one such example being the 33kg of fireworks that a Merseyside publican was storing illegally, without licence, within the pub’s cellar.

This led to a prosecution by Merseyside Fire & Rescue Authority, due to the risk posed to employees, customers and nearby properties, and resulted in a 26-week suspended prison sentence and 200 hours of community service for the guilty landlord.

Pubs can also fall foul of the law – and suffer a revocation of licence plus fines – when it comes to the immigration status of staff.  A Belfast restaurant was left facing a £60,000 fine last year, having been proven to be illegally employing three workers – for which there is little excuse given how relatively easy it is to conduct employment status.  The fine represented the standard £20,000 fine per worker.  Other fates, such as director disqualification, could await those breaching the law in the way this Chinese eatery did.

Court appearances for breaking food safety law are all too common for pub and eatery owners, whether they have been found to have infestations of pests, be serving food past its sell-by date, or generally operating to unhygienic standards.  Training in the area of food safety and hygiene is a must, if standards are to be upheld as the law expects.

It is clear that pub landlords need good levels of insurance protection, in case they need to mount a defence and pay for the legal costs associated with a court case.  Having legal expenses cover is advisable, but Directors & Officers insurance may also be required, to pick up the tab should a case be brought against the landlord as an individual.

But prevention is often better than defence, which is why robust risk management is always advised and why those unable to handle this themselves really should seek out an expert.

If this article gives you reason to think long and hard about your own circumstances and you need help with insurance for your pub operation, please get in touch.