Rising insurance rates add to climbing costs for Alberta restaurants and bars

Mike Clark has been running Mikey's on 12th, a bar and music venue in Calgary, since 2007. In those 14 years, he says he has never made a substantial insurance claim — but he still saw his annual liquor liability insurance spike from $7,800 to over $26,400 this year.

"I would think that our business is pretty safe, but who knows?"

Brennen Wowk, owner of Bo's Bar and Stage in Red Deer and vice-president of the Alberta Hospitality Association, is in the same boat. He says liquor liability insurance rates were increasing before the pandemic, and they're only continuing to rise.

Last year, his insurance spiked 150 per cent — and it increased another 30 per cent this year.

"I went through insurance carriers that were quoting me over six figures for a year's worth of coverage," said Wowk.

He says Bo's was almost at risk of not being able to get insurance at all at the beginning of the pandemic, and many operators are still facing this issue.

"I had to go pretty much throughout Canada to try to find [an insurer] that would cover me."

Alberta's hospitality industry is seeing liquor liability insurance rates double and triple, hitting live music venues harder than others. These costs are on top of already-climbing food costs, global supply chain issues, labour shortages and ever-changing COVID-19 restrictions. This could see menu prices at bars and restaurants in the province rise.

Mark von Schellwitz, western region vice-president with Restaurants Canada, says it isn't just insurance. Costs across the board are going up for restaurants and bars.

"And of course that's really difficult with the pandemic restrictions still in place to even generate pre-COVID revenue, nevermind the extra revenue that they're going to have to generate to pay for these increased costs."

Wowk says establishments that are more liquor intensive, such as bars, live music venues and nightclubs, are often seeing quotes of $50,000 to $100,000 a year for proper liability insurance.

"Specifically live music venues — they've spent the majority of the last few years completely shut down, not earning a single dollar of revenue. These companies are still having to fork out incredible amounts of money just to get their insurance," said Wowk.

Ernie Tsu, president of the Alberta Hospitality Association, says the association is trying to figure out why live music venues are being hit so hard.

"Remember, those live music venues are supporting our local musicians, DJs and the arts community," said Tsu. "It's going to be a very tough go coming into 2022."