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A lesson about general liability insurance for bar owners

Two cell phones charging

As people become increasingly dependent on cell phones, there is a growing demand for ways to charge their batteries, especially during a long night out. Allowing customers to charge their phones while sipping a glass of wine or downing a craft beer is one way for bar owners to build goodwill, but it also raises liability issues that could land a business in hot water.

How handling customer property leads to liability

When customers ask a bartender or server to charge their phone, it may seem like the best response is to simply honor the request and keep them happy. This also reduces the chances of a customer becoming angry and leaving a negative review online. But taking responsibility for customer property can be a nuisance for staff, especially on a busy night. If multiple customers ask to charge their phone, it can quickly lead to confusion behind the bar as busy bartenders try to tend to thirsty customers, while also acting as babysitters for multiple cell phones.

Unfortunately, a slowdown in service may be the least of a bar owner’s worries. As soon as a customer hands a phone over to an employee, it creates a legal situation known as a bailment. The business is now acting as a bailee – meaning the bar is responsible for the customer’s property while it’s in the bartender’s possession. As a result, bar owners could be found liable if a customer’s phone is damaged or stolen while charging.

Rather than expect bartenders to keep tabs on patrons’ phones, bar owners would be better off prohibiting staff from taking on the responsibility of trying to safeguard customer property.

3 ways to disconnect from customer property risks

Because many business owners are unfamiliar with the concept of bailment, it can cause confusion if a customer’s phone is damaged or stolen while charging. A bar owner’s first instinct may be to file a claim on a commercial property insurance policy, since it covers business property. However, that policy only covers the bar’s property, not property that belongs to a customer. For example, if the bar goes up in flames, property insurance can pay to repair or replace the building and its contents.

General liability insurance is the policy that can help pay for accidental damage to a third party’s property – like a customer’s cell phone. So if a bartender accidentally knocks a bottle of vodka onto a customer’s phone, a general liability insurance policy can help pay to repair or replace the device.

But that doesn’t mean a general liability policy should be a bar’s first line of defense. After all, the more claims a business owner makes, the higher the premium will be. To minimize the chance of a claim, bar owners might want to:

  1. Deny requests. Bar owners can make it a policy that employees never take control of customer property. However, this could create ill will with customers desperate to add more life to their phone’s battery.
  2. Collect a charging fee. Many bars and restaurants are taking this route. Asking people to pay for a service often makes them think twice about making the request.
  3. Publish disclaimers. Bar owners can include disclaimers on their website and menu stating that the business is not responsible for damaged, lost, or stolen property. However, while that might make customers think twice about asking for a charge, it doesn’t mean they still can’t sue if their phone is damaged.

Deciding how to navigate a customer’s request to boost a phone’s battery can be tricky. Bar owners need to walk a fine line between providing good customer service and protecting the business against potential legal action. While it may cause some customer frustration, enforcing a policy that prohibits employees from charging phones for customers is one of the best ways for bar owners to decrease their liability, and avoid an increase in their insurance rates.

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