NYC Bars Face Existential Threat as Liability Insurance Costs skyrocket
New York, NY – New York City bars and live venues are grappling with a crippling surge in liquor liability insurance costs, threatening their financial viability and fundamentally altering the city’s nightlife landscape. Premiums in the city average 15% higher than the national average,according to a recent report by the Partnership for New York City,and are projected to increase by 55% this year alone.
The escalating costs are placing an unprecedented strain on businesses, with insurance now exceeding rent and payroll for some.Mark Kleback, co-owner of Bushwick arcade bar Wonderville, described the situation as dire. “It’s worse than rent,” Kleback said. “Higher than our payroll…it just feels like a scam.” He added that his bar’s single insurance claim was denied, leaving him questioning the value of the coverage. “I hate every single part of the industry. Like, I would not recommend people to open a small business because of insurance.”
A recent study of New york’s self-reliant live venues revealed that rising insurance costs are a greater challenge than decreasing alcohol sales, rent, or mortgage payments.
Dhruv Chopra, co-founder of Elsewhere and a leading expert on liability insurance for New York bars, believes the industry’s rigid approach to risk assessment is ill-suited for the dynamic nature of nightlife.”They have very cookie cutter silos for how they think about risks,” Chopra said. “And that’s just not really how nightlife works. It’s not really what makes New York and going out so much fun.”
Insurers are increasingly demanding stricter operational controls, such as earlier closures and limitations on serving shots, incentivizing venues to prioritize prudence over the vibrant atmosphere that defines New York’s nightlife. Some insurers are even utilizing social media photos to justify higher premiums.
The Neighborhood Venue Alliance recently hosted a panel discussion led by Chopra to address the crisis, signaling a growing awareness of the issue and a search for potential solutions.Chopra is now considering entering the insurance industry himself, frustrated by the lack of viable options.
