Earlier this year, Toronto kicked off its first-ever town hall meeting for the city’s night economy, aiming to rev up nightlife beyond the downtown core.
With City Hall giving a nod to bylaw amendments, zoning and licensing changes are expected to happen throughout 2025, including updates on what entertainment bars and restaurants can provide.
As Toronto amps up its focus on fun after dark, it's crucial for businesses to ensure they have appropriate host liquor liability coverage.
Dan Lopes, (pictured above) assistant vice president, commercial general liability at SUM Insurance, discusses this and other Q2 trends shaping liquor liability.
Host liquor liability involves the legal accountability of individuals or businesses serving alcohol to others. If a guest gets too intoxicated and causes harm, a host could be on the hook for resulting damages or injuries.
According to Lopes, host liquor liability insurance steps in to shield hosts from potential legal claims and financial losses stemming from such situations.
Highlighting the importance of proper liquor liability protection, Lopes says:
“Claims that involve drinking and driving and catastrophic injuries can be extremely high and Canadian courts often side with the customer or patron. There’s a lot of things working against the bar owner, so it’s extremely important to have adequate liability insurance in place.”
In the wake of the pandemic, with bars and nightclubs labeled as COVID hotspots, many had to close shop as the combination of high insurance premiums and dwindling revenues became unsustainable.
But now, with business back to normal, Lopes observes a fresh wave of players requiring liquor liability insurance.
And it's not just traditional spots like bars and clubs; as Lopes says more venues like go-kart tracks and mini-golf places are serving alcohol, creating new opportunities for insurers in the space.
“There are more places now that are serving alcohol, and while it might not be the main driver of their business, more places are getting liquor licenses to serve alcohol at their venues, meaning they need liquor liability protection.”
Lopes acknowledges that bars and restaurants present unique challenges for insurers, making liquor liability a generally tough class to write profitably.
However, he underscores the role of Uber and other ride-sharing platforms in mitigating risks associated with liquor liability.
By offering an accessible alternative to driving under the influence, studies have shown that ride-sharing apps can reduce alcohol related traffic fatalities.
"With Uber and ride-sharing, more people are less inclined to get behind the wheel, especially in urban city centers, so that's a positive trend for sure," says Lopes.
The post-COVID demand for liquor coverage has not only attracted more insurers to enter the market but also means cost-saving benefits for businesses.
“In this industry, price is king. There’s not a whole lot of frills and coverages you can really offer other than host liability coverage. So, price really wins it,” says Lopes.
“If there's only one or two players writing, they can charge what they want. But with more competition, it drives down the price,” he says.
