This historic family-run pub in Tasmania was facing enforced closure when the existing insurers declined to renew the policy. But Gallagher Tasmania’s Dan Quintin wasn’t prepared to see the local institution close its doors.
The owners had worked hard to freehold the hotel after inheriting debts from their publican father, with the effort paying off in 2018, and they were blindsided when they found out a month before renewal time that they wouldn’t have property insurance.
Insurers are increasingly reluctant to cover regional heritage pubs, Quintin says, because they present a fire hazard. In fact, eight years ago a fire in one of the rooms on the second floor caused extensive damage to the Federation building. After this, the owner says, “We need to be insured for the worst possible case scenario.”
Quintin drew on his 21 years of experience in the hospitality sector and knowledge of local and overseas insurance markets to shop around for property cover, and he advised the hotel owners on the risk management strategies that would help their chances with the insurers.
Among his recommendations:
- extensive CCTV coverage of the premises
- adequate number of working exits from the building
- outsource security guards to reduce the pub’s risk profile
- thermoscans of electrical switchboards to manage potential fire hazard.
Fortunately Quintin was able to source the property cover the hotel needed, from a niche insurer. Then came another curve ball. Nine days prior to the renewal date the liability insurer also advised they wouldn’t be re-insuring the hotel. Once again Quintin scoured the market and succeeded in obtaining a solution – but both policies represented a considerable increase over the previous cost of premiums.
Through sharp negotiation he obtained a 10% rate saving on worker’s compensation cover to help defray the cost of the other policies, and also secured a premium funding arrangement so the owners could spread the amount ‒ approximately 7% of the hotel’s annual turnover ‒ over monthly payments.
The owners say that the price of the good old Red Bull vodkas may have to go up to cover the increase in premiums, but the venerable watering hole will remain open for business.
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