Why consider loss of licence cover if you’re a pub owner

March 21st, 2018
Pub Insurance

If you’re a pub owner in the UK then your licence is as crucial to your business as the premises you occupy and the alcohol you sell. Without a licence, you could find yourself facing five figure fines, as well as a potential prison term. So, if events lead to the loss of a licence it simply isn’t worth continuing to serve alcohol as part of your business. But, if the worst should happen and you end up without a licence, how can still ensure that your business has a fighting chance at survival?

Loss of licence cover

For pub owners, loss of licence cover is essential protection against circumstances where you don’t have a licence to sell alcohol. This could be a refusal to renew a licence that you have had for some time or a situation arising that results in the forfeiture of the licence. If the loss of a licence occurs, for a pub owner reliant on income from selling licensed alcohol, loss of licence cover could be the only respite.

What kind of licences are covered?

If you’re a pub owner then you’ll know that there are two key licence types – 1) the premises licence, which attaches to the location and sets out how and when alcohol can be sold there and 2) the personal licence, which is issued to an individual, such as a business owner or member of staff.

Any number of issues could arise with either the premises licence or the individual licence. The individual licence, for example – also known as the ‘liquor licence’ – is issued by a local authority but an application can be refused on a number of grounds. Individual licence holders need to be at least 18 years old and the conditions for the licence tend to vary from local authority to local authority. Crucially, if the individual licence is revoked or refused then the premises cannot sell any alcohol at all without potentially attracting problems.

When does loss of licence cover apply?

It is available where there has been a loss of licence as a result of sudden and unforeseen events. This could be a suspension, withdrawal, forfeiture or refusal to renew the licence, during the period of insurance. It’s worth noting that if the licence has been lost as a result of the actions of the licence holder then this may mean that this type of cover does not apply. For example, death of a previous licence holder or police objections to a particular licence holder may come under the exclusions in a loss of licence policy.

How does loss of licence cover provide support?

A provable loss of gross profit to the business needs to be shown for loss of licence cover to take effect. If this is established then, depending on the value of the insurance policy, loss of profit may be covered, as well as any additional expenses that are reasonable.

To find out more about loss of licence cover and how it applies to your business, get in touch with the Morgan Richardson team today.