Continuing our series of undercover investigations, we sent a budding wine bar owner out in search of building, contents and liability cover
My mission this issue is to investigate the process of insuring a wine bar. Being a great fan of The Simpsons, I thought it fun to pose as the potential proprietor of a bar named Moe's in Springfield, Birmingham. According to my internet search the closest broker is Stanford & Wood.The second thing that attracts me to Standford & Wood is the high proportion of women among the workforce. From the company director down to the four top account executives, all women. Hang on, here's a chance to put that "wouldn't the world be a better place if run by women?" theory to the test.
Business premisesI choose the extension of Rebecca King ACII. Her surname suggests seniority. I'm a little surprised when a bloke answers the phone. He says his name is Rob, that Becky is away from her desk and that he will try to help me if he can. I tell him that I am in negotiations with the owners of a restaurant on the Stratford Road, which I hope to purchase, refurbish and open as a wine bar come early July. He asks me a bit about my previous business experience. He asks about the current premises business. It's a restaurant, I chance. Rob presses me for particulars: Address? "Number 1076" I say squinting at the only number I can make out in the A-Z. I balk at inventing a postcode, but Rob says it's important that I get back to them with one. Generally postcodes beginning "B" are bad news.Rob wants to know the building specifications and reinstatement value. I say typical 1960s construction on two floors with a rebuild price tag of £200,000. Contents we round up to £15,000 (stock - £1,000, wines and spirits - £10,000, tobacco etc - £500). The anticipated gross annual turnover is £1m. This comes after some heavy prompting from Rob. I have clearly not been doing my homework. Finally, he asks me how much cover I require. I say I'd like a quote for the lot. Rob assures me that any figures I've just given him can be revised later and that nothing at this stage is in any way binding. He says that Becky will be in touch and in the meantime could I find that postcode.Back on the computer, my search engine tells me that 1076 Stratford Road is an Indian Restaurant complete with postcode. I must have been psychic. I ring back on the Thursday and leave this with another employee, this time female but still no Becky, who seems to be taking a lengthy Easter break.Sure enough, come the following Tuesday, I am treated to the dulcet tones of Rebecca King, who has rung me with some further questions. "What security system does the premises have? Is it alarmed? If so, what make and model? I say that I don't know but will endeavour to find out. Do I require a late licence and will there be entertainment?" "Very possibly," I say. Here Becky's true colours shine as the voice of cold reason, laced with caution. "A lot of insurance companies are reluctant to take on such a risk. Music, dancing and alcohol don't mix." Try telling the average 18 year old that. Bang goes my plans of having Marilyn Manson headline on a Friday night. Becky warns me that it may take some time to find a suitable quote. Undeterred, I ask her to do her best. After all, my job is to put her to the test.One whole week passes and I've heard nothing. I decide to ring Becky to see how things are progressing. She says that she has put it out to tender but so far she's not had any bites. Perhaps I'm not big enough bait. She says she'll contact her sources today or tomorrow and re-stress the urgency. Another whole week goes by and the deadline for this article is looming. Still I have heard nothing from Becky. Has she taken a permanent sojourn from her desk or is she crouched, finger on trigger, behind the proverbial bush of legal guff trying to get a fix on the elusive prey. I ring. This time it's her voice mail. I don't want to blow her cover so I leave a message sotto voce.
The waiting gameTwenty minutes later, while driving the kids back from school I get a call from someone at Stanford & Wood. I'm not quite sure if it's Becky as I fumble to insert the earpiece of my hands free. I say I'm driving and she takes the cue to be brief. "We've found you a quote carrying the premium of £2,800." I feign relief and satisfaction. "Can I have it in writing?" I ask. "Of course, we'll get it in the post by Tuesday."Friday rolls round and the Insurance Times hounds are on to my scent. I'm just reaching for the phone when 'flop', the written quote lands on my doormat. I peer through the letterbox half expecting to see Becky disappear behind the neighbour's privet. The quote comes on three letter-headed pages of the finest bond complete with Stanford & Wood watermark. Top marks for presentation. The insurer is Zurich and the policy is in compliance with its minimum-security level B requirements, outlined on a separate sheet. There are no hidden surprises. Everything is laid out as discussed with an indemnity period of 24 months, loss of licence cover up to £100,000, employers' liability, £10m, public liability, £2m, products liability £2m and an excess of £250 increasing to £1,000 for subsidence. The more accurate premium of £2,752.09 is average. At the bottom Becky confirms that the quotation is subject to there being no dancing or entertainment at the premises. Humph!I decide to phone Becky one last time. She answers after the first ring, redeeming herself. I ask if there is any possibility of negotiating a one-off or even weekly late hours extension with Zurich. She says there is absolutely no chance. Sensing my disappointment she vows to try other sources but advises me not to hold my breath. "It might even mean approaching Lloyd's as a last resort". I ask her what she means by that. She assures me that "with Lloyd's most things are possible but end up very costly".
Problematic areaI thank her for the work she's done on my behalf and hang up. I think I'll email her and say the negotiations with the vendors are off. It breaks my heart to think of her beavering away into the night to no avail.Well, it has been an eye opener. Due to the long periods of silence from Rebecca King, my initial impression of Stanford & Wood is that finding insurance for wine bars is more trouble than it's worth. Incidentally, commission on a policy like the one quoted runs at 17.5%. At one point I wished Becky would come clean and admit that this is not an area they tend to favour. Perhaps even recommend a broker who specialises in it. As things progressed, though, I began to appreciate what a potential insurance minefield such drinking establishments can be. The whole prospect of entertainment throws up all sorts of litigation issues regardless of whether or not there is a dance floor. After all, Becky did approach seven different companies. As Moe knows all too well, it only takes one character like Barney and a pint of Duff beer.