If you want to open a pub in the UK, dedicated pub insurance will give you comprehensive cover to help you manage and mitigate numerous risks.
In this post we will outline the key areas of cover that every pub owner should consider. We will also discuss a few other factors to bear in mind, from choosing the right location to ensuring you have enough money to cover your initial startup investment and your ongoing running costs.
What Insurance Are Pubs Legally Obliged to Have?
There are at least two forms of cover that you simply cannot do without:
- Employer’s liability insurance. If you employ any staff, even if they are family members, then you have a legal obligation to get employer’s liability insurance. This will cover your staff for any accidents or injuries they may experience while on the job.
- Buildings insurance. You may also be required to get a level of buildings cover as part of your pub leasehold or freehold arrangement. If you enter into a contract with a brewer, they may set certain cover requirements too.
Recommended Insurance for Pub Owners
Beyond this, you should consider the following forms of cover:
- Contents cover: To cover your fixtures, fittings, equipment, and barware for loss, damage, or theft.
- Public liability insurance: To cover your guests and other members of the public for any accidents and injuries they may sustain while spending time on your premises.
- Business interruption insurance: This can cover your overheads should an unexpected event, such as a fire or a flood, ever prevent you from opening your pub.
- Product liability insurance: To cover you for any issues with the products you sell in your pub, such as food and drink.
Read our full guide to pub insurance.
What Else to Consider When Opening a Pub
Choosing a Location For Your Pub
Your pub’s location may be the biggest driver of your future success. As we will see below, when it comes to choosing a location for your pub, your ultimate decision may ultimately come down to your budget. But you should certainly consider the following when sourcing possible locations:
- How will people get to your pub? Is it in a public area with lots of footfall? And if not, is there adequate parking onsite or nearby? And what are the public transport links like?
- Customer base. What sort of people live in the area where you will be opening your pub? How old are they, and what is their average income? Understand the local demographics and you will have a better idea of how you can tailor your pub to meet their preferences.
- Are there any other pubs in the area? Are they successful, or are they struggling? What are they doing that you could emulate? And crucially, what are they not doing that you might be able to do better?
How Much Does it Cost to Open a Pub?
The amount it will cost to open a pub will depend on whether you want to enter a pub tenancy, or buy a pub outright.
- Pub Tenancy – This means that you will run an established pub for a set amount of time, which is usually around five years, without taking out your own pub lease or freehold. According to Greene King, which offers pub tenancies as well as franchise options, it costs at least £20,000 to enter a pub tenancy agreement.
- Buying a Pub Outright – The amount you pay to outright buy a pub will depend on the pub’s location, and its condition. The overall costs of acquiring and refurbishing the property could easily reach five or six figures.
Calculating Your Pub Running Costs
- Equipment, fixtures, and fittings: You will have to make an initial investment in a POS system; in fridges, coolers, and racks; in bar furniture; in lighting and décor, and in glassware and other barware. If you want to serve food, you will also need kitchen equipment. As well as the initial setup costs, you will also have to consider the ongoing costs of maintaining this equipment, and of repairing and replacing items where necessary.
- Utility costs: You will have to pay for gas, power, and water. Businesses pay different rates for utilities than homes. Take a look at the latest UK business energy rates.
- Supplies: You will regularly need to order new barrels and casts of beer and ale, while also keeping your supplies of wines, spirits, and soft drinks topped up. And if you want to serve food, you will also have to stay on top of your food stock. Pubs often enter a contract with a specific brewer to help streamline this process, as it may mean that they only have a single point of contact for arranging supplies.
- Business rates: This is a tax applied to all properties that are used for business purposes. The good news is that pubs are eligible for the Business Rates Relief scheme. Head to the Government’s website for more information on how to apply.
Get Dedicated Pub Insurance From James Hallam
As an independent Lloyd’s broker, we have been providing dedicated insurance solutions to hundreds of pubs and bars across the UK since 1982. With our specialist Touchstone scheme, we can design a pub insurance package to match your unique requirements, whether you run a traditional pub in a small village, a high street wine bar, or a pop-up bar at events.
Learn more about our bespoke insurance services for pubs.