Pub insurance explained: the one policy the law requires, the covers every lease and licence demands, what a pub actually claims for, and what invalidates a claim
What insurance a UK pub needs: employers' liability by law, public and products liability, buildings, contents, stock and money, business interruption, loss of licence, legal expenses, deterioration of stock and equipment breakdown, typical costs, and the compliance conditions that invalidate claims.
A pub insures three things: the people who might be hurt, the building and everything in it, and the trading it would lose if either went wrong. Only one policy is required by law, but the lease, the pubco tenancy agreement, the premises licence conditions and the pavement licence all require others, and the gap between what is compulsory and what a landlord or licensing authority expects is where operators get caught.
This guide sets out each cover in the order a broker would, explains what a pub actually claims for, gives a realistic idea of cost, and then the part most guides leave out: the compliance conditions in the policy wording that let an insurer refuse the claim.
8 steps to complete
Employers' liability: the one policy the law requires
If you employ anyone, including casual and part-time staff, the Employers' Liability (Compulsory Insurance) Act 1969 requires at least £5 million of employers' liability cover from an authorised insurer, and the certificate must be displayed or available to staff. Most policies carry £10 million. The fine for trading without it is up to £2,500 for every day you are uninsured, and £1,000 for failing to produce the certificate. It covers compensation and legal costs when an employee is injured or made ill by their work: the porter who slips on the fryer oil, the chef with dermatitis from the glasswash detergent. Family-only businesses with no other employees are exempt, but the moment you take on a Saturday worker you are not.
Public liability: not compulsory, not optional
Public liability cover pays compensation and legal costs when a member of the public is injured or their property damaged because of your business: the customer who slips on the wet floor, the allergic reaction, the food poisoning outbreak, the coat ruined by a spilled tray. There is no legal requirement to hold it, but no landlord will grant a lease, no council will grant a pavement licence and no brewery or pubco will sign a tenancy without it. £2 million is the floor most contracts ask for; £5 million is now common because a single serious injury claim can exceed £1 million. Check that food and drink supplied is covered (products liability) and that the policy extends to outside areas and events.
Buildings, contents, stock and money
If you own the building you insure it; if you lease it, the lease says who does, and most leases put the buildings insurance on the landlord with the premium recharged to you, so check rather than duplicate. Contents cover is for the fixtures, fittings and equipment you own, and the sum insured should be the replacement cost of everything from the range to the tills. Stock cover, including frozen food in the event of freezer breakdown, needs a realistic figure for the busiest week of the year. Money cover handles cash in the safe, in transit and in the tills, with separate limits for each, and business-hours and out-of-hours theft.
Business interruption: the cover that keeps you trading
A fire in the extraction that closes the kitchen for three months costs more in lost profit than in repairs. Business interruption cover replaces the gross profit you would have earned and pays the increased costs of working around the damage, for an indemnity period you choose. Twelve months is the minimum worth having; kitchen fit-outs and licensing rarely finish in six. Check the definition of gross profit matches your accounts, that the sum insured is not understated, and whether the policy includes cover for closure by a public authority, which is the clause that mattered in 2020 and is now often excluded or restricted.
The covers specific to a licensed venue
Loss of licence cover pays if the premises licence is revoked, suspended or not renewed for reasons beyond your control, protecting the value of the business. Legal expenses cover pays for employment tribunal defence, licensing hearings, HSE prosecutions and tax investigations, and comes with a helpline that is worth the premium on its own. Deterioration of stock covers frozen food lost to a breakdown or a power cut. Glass cover, for plate glass windows and fixed glass, is cheap. Equipment breakdown pays for the compressor rather than the food. Employment practices liability covers discrimination and unfair dismissal claims. Cyber cover is now worth considering for any venue holding customer data or taking bookings online.
What invalidates a claim
Insurers decline claims when a condition of the policy was not met, and the conditions track the compliance you should be doing anyway: a current fire risk assessment, an annual gas safety certificate, extraction cleaned to TR19 at the stated frequency, electrical installation tested, a working burglar alarm set at night, cash limits kept, and no undisclosed changes to the business. A fire claim declined because the canopy had not been cleaned in fourteen months is the classic hospitality case. Read the policy conditions, put each one on the compliance routine, and keep the certificates where you can produce them.
Renewal: shop it, declare it, diarise it
Hospitality insurance is placed by brokers who specialise in it, and their market knowledge is worth more than a comparison site for anything above a cafe. Get two quotes at each renewal, declare every material fact (a new fryer, later hours, live music, a claim you settled yourself), and check the sums insured have kept pace with your costs. Put the renewal date, the excess and the broker on the licence and certificate tracker so a lapse never happens by accident, and file the schedule and policy wording where the manager can find them on the night something happens.
What a pub pays
Premiums depend on turnover, rateable value, location, claims history, security and the covers chosen. A small community pub with a modest kitchen might pay £1,000 to £2,500 a year for a combined policy with employers' and public liability, contents, stock and business interruption. A larger food-led pub with rooms, live music and late hours can pay £4,000 to £10,000. Tenanted and leased pubs often have the buildings insured by the pubco and recharged in the rent. Excesses of £250 to £500 per claim are normal; higher excesses reduce the premium, and the escape of water excess is often higher than the rest.
Tips for success
Common mistakes to avoid
Frequently asked questions
Is pub insurance a legal requirement?
Only employers' liability insurance is required by law, at a minimum of £5 million if you employ anyone. Public liability, buildings, contents and business interruption are required by leases, tenancies and licences rather than statute, and no pub trades without them.
How much does pub insurance cost?
From around £1,000 a year for a small community pub to £10,000 or more for a large food-led pub with rooms and late hours, depending on turnover, location, claims history and the covers chosen.
What is loss of licence insurance?
Cover that pays for the reduction in the value of the business, and sometimes the lost income, if the premises licence is revoked, suspended or refused renewal for reasons outside your control. Check whether it also responds to a review that reduces hours.
Does public liability cover food poisoning claims?
Yes, provided the policy includes products liability for food and drink supplied. Check the wording, and keep the due diligence records that let the insurer defend the claim.
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