PRODUCT: wine bar insurance

COMPANY: ProHost USA and XL Catlin

BEST RATING: A (Excellent), size XV (XL Catlin admitted paper)

AVAILABILITY: Coverage is available through independent agents and brokers.

FOCUS: Wine bars are upscale establishments that focus on selling wine rather than liquor or beer and usually have a food menu featuring small plates accompanied by pricey wine by the glass, says Heidi Strommen, president of ProHost USA, which has specialized in the hospitality industry since its founding in 1989.

As wine bars continue to gain popularity, they require a special insurance package due to their unique nature. Now, ProHost offers one on admitted paper so agents and brokers don’t have to go to the excess & surplus market. “The high proportion of liquor receipts—more than 50%—is driven by the high price of the wine and the small plate approach,” Strommen explains.

Many underwriters would classify that high percentage as a bar exposure, with commensurate insurance costs. “But we’re looking beyond that to see what people are going there to do, which is to sample high-end wines and have a little food,” Strommen says. “We feel it’s closer to a restaurant exposure than to a bar exposure. People are not going there to have too much to drink.”

In response, ProHost offers a package that includes property, general liability, crime and liquor liability as basic coverage. What’s different is the admitted package program. “Usually wine bars would go into the E&S market, which doesn’t have the bells and whistles,” Strommen says. “We’re underwritten by admitted paper, and we’re offering business interruption that includes overhead wire transmission lines. A lot of E&S policies will exclude that.”

ProHost also covers sewer and drain backup, food spoilage and umbrella, as well as employment practices liability as an endorsement. “And we include liquor liability,” Strommen adds. “Often with these higher liquor receipt ratios, liquor is excluded. We keep the cost down and increase efficiency in the claims process by offering it all in one policy.”

The firm also considers new ventures if the hosts have no prior experience in wine bars and restaurants. “This differentiates us from others that won’t consider hosts unless they’ve been in business two or three years,” Strommen says.

UNDERWRITING: General liability limits on primary are $1 million per occurrence/$2 million aggregate. There is no GL deductible. No specific limitations apply to property. ProHost offers a range of options on the property deductible, starting at $1,000. The firm requires an ACORD application, a ProHost supplemental, which is available online, and loss runs. Policies are annual. Cancellation terms are standard ISO.

MINIMUM PREMIUM: $5,000

TARGET: establishments that serve a wide selection of wines by the glass and also offer a robust food menu, including small plates or entrees

COVERAGE TERRITORY: All U.S. states except Alabama, Alaska and Washington, D.C.

CONTACT: Kim Connell, business development; ProHost USA, 4500 Park Glen Road, #410, St. Louis Park, MN 55416; 952-924-6924.

Ronimarie Acord is an IA contributor.