Banquet halls bring joy to many people, but running these establishments brings a variety of risks, from a guest suffering an injury on the premises to property damage caused by unexpected disasters like a fire. Dealing with a major lawsuit or disaster would be financially ruinous to many companies. Having the right insurance coverage to provide your business with financial support can help you survive tough times.

What insurance coverage do I need for my banquet hall?

There are many types of insurance coverage to consider, but these policies are particularly relevant to banquet halls:

General Liability Insurance

General liability insurance covers incidents of third-party property damage, bodily injury, personal injury, and advertising injury. Since banquet halls are frequented by large groups of guests and customers, there is a higher risk that someone could be injured or property could be damaged. 

Common accidents such as tripping or slipping and falling can result in serious injuries. If a client is hurt while at your location or if you accidentally damage their property, your business could be held liable. General liability insurance can also include a personal and advertising injury component, which provides coverage for a number of non-physical injuries, including libel, slander, and copyright infringement.

Examples: 

• Bodily injury: A guest at your banquet hall slips on spilled water on the dancefloor and falls, severely twisting his leg. He requires medical attention. General liability insurance would cover medical costs as well as legal fees if the injured person sues.
• Property damage: One of your employees accidentally knocks a customer’s expensive projector off a table, shattering it. General liability insurance would cover the damages. 

Commercial Property Insurance

Banquet halls rely entirely on their physical locations to operate. If an unexpected disaster strikes, repairing or replacing your damaged property could be costly and devastating to your company’s finances. Commercial property insurance can help your banquet hall recover by providing funds to repair, rebuild, or replace damaged business property. Commonly covered perils under standard property policies include fire, lightning, explosion, vandalism, windstorm, and hail.

Commercial property insurance covers the following:

• Buildings belonging to or leased by your company
• Contents of the building, including furniture, computer equipment, and artwork
• Property of others while it is under your care, custody, or control

Example: 

• A short in your lighting system causes a fire to break out in your banquet hall, causing severe structural damage to the building. Commercial property insurance would cover the costs of repairs to your building.

Business Interruption Insurance

Business interruption insurance is a common addition to a commercial property or a business owner’s policy and provides coverage for lost income and operating expenses if you are forced to temporarily close due to property damage from a covered peril. Since banquet halls rely on their property to operate and cannot easily continue from another location, it’s wise to secure this type of insurance. Commonly covered perils include fire, lightning, windstorm, hail, explosion, and vandalism.

Example: 

• After a fire, you are unable to reopen your banquet hall for several months, forcing you to cancel or postpone customer bookings. Business interruption insurance will cover rent payments, employee salaries, and lost profits while you are unable to operate your business.

Liquor Liability Insurance

If your banquet hall sells alcohol, liquor liability insurance will be necessary, as you could be held liable if a customer drinks too much and causes bodily injury or property damage. If a guest at your establishment becomes intoxicated and subsequently causes a car crash, damages someone else’s property, or injures someone else, you could be sued. 

Many states have “dram shop” laws that hold businesses liable if they serve an intoxicated customer who later causes an accident or injury. Liquor liability insurance will step in to cover any claims that arise as a result of liquor liability. Commercial leases or liquor license laws may require you to have this coverage.

Example: 

• An event attendee becomes severely intoxicated, then leaves in his car. He backs into a pedestrian, causing severe injuries. His blood-alcohol level was found to be well over the legal limit. The family of the injured pedestrian sues your business. Your liquor liability insurance would cover the lawsuit and any resulting settlements.

Workers’ Compensation Insurance

If employees are injured or fall ill as a result of their work, workers’ compensation insurance will provide financial and medical benefits during their recovery. Employees of banquet halls could be injured by a number of common accidents such as slips and falls or strains, and injuries could occur while instructing dance classes or performing as well. 

Workers’ comp will pay for medical expenses, lost income, and rehabilitation for injured workers, and it can also provide death benefits and funds to cover funeral costs in the case of a work-related death. Workers’ comp coverage is legally required for companies with employees in most states, and penalties can be severe if you do not have adequate coverage.

Example: 

• An employee falls off a ladder while changing a lighting fixture. The employee breaks several ribs and dislocates her shoulder, requiring medical attention. Workers’ comp would pay for her medical bills and a portion of lost income during her recovery period. 

Commercial Crime Insurance

Banquet halls may handle large amounts of cash, especially if they run events with cash ticketing, such as performances, classes, or exhibitions. This can result in an increased risk of losses from theft or other crimes. Commercial crime insurance can step in to provide funds to reimburse you for losses caused by theft, robbery, fraud, forgery, burglary, and other crimes committed by outside parties or your own employees.

Example: 

• Your banquet hall is running a popular dance showcase event and many attendees buy tickets at the door with cash. While one of your employee’s back is turned, a cash box is stolen with over $5,000 in it. Your commercial crime insurance would cover the loss. 

Additional Coverages

• A business owner’s policy (BOP) may be a good choice for qualifying small and midsize businesses. This type of policy combines general liability, property, business income, and extra expense coverage into a single package, helping you acquire a wide range of coverage. The cost of a BOP is typically lower than buying each insurance policy separately.
• Bailee’s customer insurance covers the property of clients while it is in your care, custody, or control. Some ballrooms or dance halls may offer coat and bag checks; this coverage can protect you if anything happens to customers’ property while it’s in your care.
• Product liability insurance can protect your business from financial and legal consequences as a result of bodily injury or property damage due to the use of your business’s sold goods or products. If your banquet hall has a kitchen on-site and produces and serves food, your businesss may be held liable if someone becomes ill after consuming your food.

Pricing and Quotes

Pricing for business insurance will vary based on the type of insurance coverage and the risk profile of your business. Insurers consider factors such as:

• Business size
• Industry
• Location
• Number of employees
• Claims history

Businesses with higher risks will have higher premiums than those deemed lower risk. For example, a banquet hall with a history of frequent claims will face higher premiums. Premiums also rise as you increase the limits of insurance. Different insurance companies have different models for rating risks, so it is worth comparing pricing across different insurers.

In order to get an accurate estimate on pricing, it’s best to get a quote from a reputable insurance company. Below we’ve highlighted a few of our trusted partners who offer coverage for banquet halls:

Provider	General Liability	Professional Liability	Business Owner's Policy
Embroker	??	??	??
CoverageSmith	??	??	??
CoverWallet	??	??	??
Hiscox	??	??	??
Thimble	??	??	??

Business Insurance and Coronavirus

Many banquet halls have been forced to close by the COVID-19 pandemic, and business owners may be wondering how insurance can provide coverage during the pandemic.

It’s important to understand that you cannot purchase a new policy to cover coronavirus-related losses that have already occurred; insurance policies will not cover losses that have already been discovered.

In the majority of cases, business interruption insurance policies you have in effect will not cover losses caused by coronavirus.  Although there are court cases in progress, it’s not yet clear whether courts will rule in favor of small businesses over the insurers. In general, these policies typically only cover losses caused by a direct physical loss or damage, like a fire or theft. Some business interruption policies will include coverage for losses caused by “communicable or infectious diseases,” but this is rare.

How workers’ compensation insurance handles coronavirus cases varies widely depending on the state. If you have employees who contract coronavirus on the job, they may be eligible for workers’ compensation payments in some states.

If your business continues operating and a client or other third party sues you claiming that they contracted coronavirus from your business, some commercial general liability policies will provide coverage, depending on your individual policy and the laws of your state.

Consult our FAQ on coronavirus and business insurance for more information.

Final Word

As you review what types of business insurance to purchase, it’s important to consider the various major risks for which your banquet hall could be held liable. Business insurance can help your company cope with unexpected disasters, whether it’s a fire or serious storm that damages your property or a client injury that happens on your property. With the right insurance coverage, you can feel secure knowing that you would be financially protected from any unforeseen events.