PRODUCT: Liquor liability, commercial property, commercial general liability and excess liability for establishments that serve or sell liquor
COMPANY: Hospitality Insurance Company is a wholly owned subsidiary of Hospitality Mutual Insurance Company. The company operates as Hospitality Mutual Insurance Company in Massachusetts and as Hospitality Insurance Company in all other covered states.
BEST RATING: None, but has a Demotech rating of A/Exceptional. Visit the Hospitality Insurance Group website for additional information.
AVAILABILITY: Hospitality Insurance writes through only appointed independent agents. Those who are not appointed can access the coverage through wholesalers. Visit the Hospitality Insurance Group website for additional information.
FOCUS: Since getting its start in the liquor liability niche as the Liquor Liability Joint Underwriting Association of Massachusetts 29 years ago, Hospitality Insurance Company has made a name for itself insuring businesses with higher-than-usual liquor sales. “We will write an establishment with 100% liquor,” says Sandra Haley, senior vice president of underwriting and marketing—a big deal in a niche where many standard companies balk at an establishment where alcohol comprises more than even 40% of sales.
For the firsts two decades the company was in business, “we couldn’t say no,” Haley says. But in 2008, Hospitality changed its pricing structure, adding coverage for property and general liability as well as liquor in order to appeal to higher-quality clients. “We’re experts in the niche,” Haley says. “We’ve been doing it forever. We understand the business, we understand how they pay their bills, we understand how they buy their alcohol and we understand assault and battery. So we came out with a great product for this class of business.”
According to Haley, what sets Hospitality apart is its refusal to limit coverage for assault and battery—one of the top causes of loss in the niche. The risk falls into two categories: liquor assault and battery, where patrons get drunk and start a fight; and general assault and battery, where patrons aren’t drunk but happen to be in a bar when they go fist to cuffs. As carriers continue to suffer assault and battery losses with their liquor liability clients, many have attempted to reduce their exposure by making coverage limits less readily available, substituting low sublimits in their place.
Not Hospitality. “We don’t believe in that,” Haley says. “That’s like selling you a homeowners policy and telling you we’re only going to give you $100,000 for a fire, even though you have insured your property to $1 million. If that’s a coverage the establishment needs almost more than any other type coverage, you’re doing a huge disservice to your client if you don’t give them full assault and battery.”
So if a client buys a $1-million liquor liability policy from Hospitality, they get $1 million for liquor assault and battery—not a $50,000 sublimit in its place. And while many competitors exclude general assault and battery altogether since it’s often difficult to determine whether liquor was involved in an incident, Hospitality offers an enhancement endorsement for general liability assault and battery coverage up to full policy limits.
UNDERWRITING: Maximum limits of $1 million per person and per occurrence or $2 million aggregate. Excess limits of up to $3 million available. Hospitality pays first-dollar defense with no deductible applicable. Assault and battery coverage up to full policy limits, with no sublimits or deductibles. Discounts are available for loss-free establishments, alcohol and security training, age verification systems, fine-dining standards, association membership credits and early closing. Standard application requires information about the establishment’s entertainment offerings and frequency, food sales, liquor sales, alcohol awareness training, security training and location.
MINIMUM PREMIUM: $750, but “most people don’t hit our minimum premium,” Haley says. “Our type of risks rarely falls in that minimum.”
TARGET: Hard-to-place liquor risks, including bars, restaurants and taverns, as well as nightclubs, social clubs, liquor stores, caterers, gentleman’s clubs, BYOB establishments, wineries and temporary events. “If you have the restaurant that only sells 20% alcohol, any mainstream company will write that because the liquor receipts are so low,” Haley says. “Where the market starts to tighten is where your liquor sales increase to 40-50% and higher. Those are the types of establishments we really shine for.”
Hospitality is not a market for BOPs, buildings under major construction or renovation and 24-hour operations.
COVERAGE TERRITORY: MA, NH, PA, RI and VT.
CONTACT: Sandra Haley, senior vice president of underwriting and marketing; Hospitality Mutual Insurance, 95A Turnpike Road, Westborough, MA 01581; 877-366-1140.
Jacquelyn Connelly is IA senior editor.