Canada’s Nightlife Outpaces Insurance Policies
Canada’s vibrant nightlife is evolving faster than the insurance industry can adapt, warns commercial broker Laura Galway of Mitchell & Abbott Group. The traditional insurance playbook, built for a different era, is struggling to address modern risks associated with contemporary nightlife venues.
The shift is driven by Gen Z’s preferences, cashless payment systems, and venues that double as various establishments, from bookstores to bars. Modern insurance policies are challenged by layered and unpredictable exposures, where a single oversight can leave businesses vulnerable. For instance, when a nightclub’s liability coverage cancels the moment staff physically interact with a guest, it highlights the need for more comprehensive policies.
Digital Risks in Nightlife Venues
One of the most significant vulnerabilities in modern nightlife is technology-related risks. With the prevalence of cashless payments, venues are exposed to cyber threats such as card skimming. Galway recalled a venue that suffered a crime loss after a patron used a scanner device to steal card information. This incident underscores the need for better cyber coverage and education for both brokers and clients.
“Cyber is so relatively new in our industry,” Galway explained. “A lot of brokers are not educated enough.” The assumption that digital security is guaranteed leaves younger consumers and businesses unprepared for cyberattacks. Galway emphasized that cyber coverage should be strongly considered by all venues.
Physical Risks and Liability Gaps
Physical interactions between staff and patrons also pose significant liability risks. Many commercial policies include a standard exclusion for forcible ejection, meaning liability coverage can be automatically canceled when staff physically remove guests. This clause is often unknown to venue owners until it’s too late.
The situation becomes more complex with the presence of recreational drugs, which are not regulated like alcohol. If someone overdoses on-site, the venue can be held responsible. Galway noted that there’s currently no insurance coverage for such incidents.
Challenges of Hybrid Venues
The rise of multi-use venues, such as bookstores serving cocktails or cafés becoming clubs, adds another layer of complexity. These hybrid establishments require specialized insurance policies that can adapt to their changing use cases, particularly when liquor is involved. Galway stressed the need for individual policies and additional liquor permits to cover events outside the primary venue and hours of operation.
Adapting to Cultural Shifts
Galway observes a generational tension in how risks are managed. Young workers are often advised not to intervene in incidents, creating legal risks even for harmless interactions. The insurance industry must adapt to these cultural shifts and operational ambiguities to provide adequate protection for modern nightlife venues.
As the lines between venue, platform, and pop-up continue to blur, so does the distinction between what’s insurable and what’s not. Galway’s warning is clear: the insurance industry must evolve to keep pace with the changing nightlife landscape, or risk being left behind.
