(Note: This story appears in the September 2021 issue of ED Magazine)
There are a handful of items your club needs to operate, and insurance is certainly at the top of that list. But which companies have your best interests in mind, and which ones truly know the specific needs of the gentlemen’s club industry?
In addition to this issue’s cover story on Pike Barber’s Hospitality Insurance Agency and the featured story on John Jacquat’s Pure Risk Advisors, the following insurance companies serve the adult nightclub industry and should also receive your consideration.
Gallagher
Founded by Arthur J. Gallagher in Chicago in 1927, Gallagher has grown to be one of the leading insurance brokerage, risk management, and HR & benefits consulting companies in the world. With significant reach internationally, Gallagher employs more than 34,000 people worldwide.
Their people partner with businesses across countries and international territories to provide relevant and impactful professional advice. Regardless of what risk and HR & benefits and compensation challenges their clients have, they work hard and utilize industry-specific expertise to find the best solution and deliver it with world-class service.
For more information, visit ajg.com or call (630) 773-3800.
RMS Insurance Brokerage
(Note: RMS is a previous EXPO exhibitor.)
RMS Hospitality Group is the newest national insurance program of RMS Insurance Brokerage, LLC. With more than 20 years’ experience, the New York-based insurance company provides insurance brokerage, consulting and insurance underwriting for its clients. RMS HG continues in the tradition of RMS; long known for its insurance expertise, well-trained and dedicated staff and commitment to excellent insurance.
Brokers love RMS Hospitality Group because they know the hospitality program insurance industry and take their time and reputation seriously. Insurance brokers benefit from the highly integrated knowledge of RMS HG’s underwriting, claims, legal, and back office operational strengths.
Policyholders and prospective insureds love RMS because they provide a comprehensive liability insurance program with specialized services from application through claims. Policyholders and prospective insureds
share the confidence knowing the management and staff of RMS HG themselves have extensive experience in managing and staffing clubs, bars, and restaurants. RMS HG knows the daily challenges to success that bar, club and restaurant owners confront. They work to mitigate risks that are inherent in such businesses.
Their proprietary claims service, SKOPENOW, is a value-add that can save millions of dollars in unwarranted settlements.
For more information, visit rmshg.com or call (888) 359-8390.
Associated Agencies has protected its clients for over a century
Their vice president, Grant Veitch, discusses key insurance issues including COVID, workers’ comp and the importance of staff training.
ED: Talk about the history of your company and how you started working with the gentlemen’s club industry?
VEITCH: Associated has been around for more than 100 years. Back about 24 years ago, we had an agent that got involved and started our insurance program for gentlemen’s clubs. Helene Berns and I are the main people now — the person who started it passed away — and we took over about 15 years ago and have been showing our support for the industry ever since.
ED: Why should clubs choose your company for their insurance needs?
VEITCH: We really get involved with our clients and protecting them. We take their needs personally to make sure they’re covered should something happen, make sure they understand the coverages — know what they’re buying and why they’re buying it. We also go one step further in getting to know them and their business and not just sell them a policy. We make a good effort to be with them, not just go to the club but get to know the person who owns the club, their goals, what they’re trying to accomplish, are they concerned or aware of certain things? Many times people think of insurance as this thing to do because they have to. We take that extra step to get to know them on a personal basis so we can better serve them and protect their business interests. I would add as a general note that coverage and risks are all changing constantly and it’s good to continuously have open communication with your insurance professional.
ED: Is there any type of policy/coverage club owners may not be aware of that are imperative to the industry (either now or moving forward)?
VEITCH: The often unnoticed coverage that most business owners question is employment practices coverage. Employment practices liability is not covered under a standard liability policy, it’s specifically excluded. It covers for those things that happen in a workplace like wrongful termination, wrongful hire, sexual harassment. In the case of dancers, the most common lawsuit that’s been occurring has been class-action lawsuits for wage- and-hour claim violations — the dancer says you didn’t pay at least the amount of minimum wage, and in some states that’s become an issue. There are some landmark multi-million-dollar cases out there around this. That’s a coverage that often goes unnoticed, but these claims do happen and they can happen from a dancer or any of the wait staff, security or anyone else.
ED: What’s the biggest liability gentlemen’s clubs face with underwriters?
VEITCH: I don’t know if there’s just one thing but the biggest thing is claims and how to prevent the claims before they occur and taking the steps necessary to mitigate risk, like security and alcohol-service training. Sometimes people aren’t aware of potential risks. For example, a club owner may know they need a security guard, but I mean taking it a step further to identify potential problems before it becomes an event or de-escalation training so you don’t get to the point where you’re playing catch up or reacting to the situation.
ED: What steps can clubs take to reduce policy costs and make sure they’re equipped to get the best deal possible?
VEITCH: A lot of it is training and not just a one-time deal. Training is an ongoing effort. You want to live in an environment where there are regular meetings; have experts come in to train or discuss your staff. You want to get to the point where you’re talking on a regular basis about the things you want to do as a team to become successful and have a successful location. For example, having on-site training is superior to online training which isn’t retained nearly as well. Ultimately, you want to prevent incidents from happening that can then make it difficult to even buy insurance.
ED: How has COVID (even if we are coming out of it) affected policies for gentlemen’s clubs? Are there signs of the pandemic affecting policies/coverage in the future (i.e. virus clauses)?
VEITCH: Some policies don’t have a virus exclusion on the liability side, so now everybody’s getting those exclusions on coverage. They never intended to cover for a pandemic virus but it’s no different than somebody saying ‘I got disease X’ from a dancer or your club. COVID just put more of a spotlight on other things in nature that weren’t intended to be covered under the policy. It has changed on the workers’ comp because if you have an employee that contracts COVID at work, they’re eligible to file for workers’ comp. The difficulty is proving they did or didn’t contract it at the place of employment. Right now, states are grappling with how to handle that because there will be an influx of COVID claims from employees and from patrons claiming ‘I was there. You had six other people that had COVID working there and I got it, too.’ States can say COVID is covered like anything else or say it’s not covered or arrive in the middle — well COVID could be covered. The thing I’m running into is some states say you have to have nine people that get COVID from your location in order for it to be considered a workers’ comp claim. States haven’t quite figured it out yet, but that’s where we see it going.
For more information, visit assocagencies.com or call (847) 427-8400.
Insuring clubs from… you guessed it, coast to coast!
Sherri McCullers, President of Coast to Coast Commercial Insurance, has never shied away from working with adult clubs on their insurance. In fact, she finds it “challenging and exciting” and in this article, offers some valuable insight for club operators.
ED: Talk about the history of your company and how you started working with the gentlemen’s club industry?
MCCULLERS: My former employer, Thomas Ferguson, had a niche for this specific class of business. I found it to be more challenging and fun to work with. When he passed in 2007, I decided to continue his legacy and opened my own agency.
ED: Why should clubs choose your company for their insurance needs?
MCCULLERS: My focus has always been geared towards the hospitality industry, but I find the adult venues to be more exciting and more challenging. I have spent a large amount of time in my career learning as much as I can about them. I have many clients I have been working with for more than 20 years.
ED: How does the ongoing dynamic of dancers being classified as employees or independent contractors affect what type of insurance clubs are eligible for? How does the classification affect workers comp?
MCCULLERS: Most policies will have an exclusion for the entertainers as independent contractors. They can be covered under a workers’ comp policy as employees. Many carriers will still not want to cover them so you have to find carriers that are on board with the risk. It is an ongoing challenge so we are continuously looking to broaden our markets.
ED: How does workers comp differ from dancer (be it an employee or independent contractor) to staff (bartender, door guy, wait staff, etc.)?
MCCULLERS: The rates are different and not all carriers will write a workers’ comp policy for the dancers, so you have to be diligent about making sure you have placed them where they are included.
ED: Given cases with employee vs independent contractor status, is there any type of policy/coverage club owners may not be aware of that are imperative to the industry (either now or moving forward)?
MCCULLERS: Concerning the employee versus independent contractor status, I would advise the client have a contract in place specifically showing they are not insured at any point under any circumstance while in the establishment as the independent contractor. If they are employees, be sure you also have them sign off regarding their coverage or lack thereof under the workers’ comp.
ED: What’s the biggest liability gentlemen’s clubs face with underwriters?
MCCULLERS: Assault and battery.
ED: What kinds of coverages do you specialize in providing to gentlemen’s clubs — are you a one-stop shop or do you provide a more specialized coverage?
MCCULLERS: We are a one-stop shop for the gentlemen’s clubs. We offer general liability, liquor liability, assault and battery, workers’ comp, property coverage, cyber coverage, active shooter coverage and more.
ED: What steps can clubs take to reduce policy costs and make sure they’re equipped to get the best deal possible?
MCCULLERS: Clean up your websites and social media pages. Carriers scrutinize everything. If they see flaming shots being served to a girl that looks 18, they are going to pick it apart. Trust me when I tell you they look at your pictures and what is happening in the background. Websites that list any occurrences or events that have occurred, Yelp reviews, etc.
Make sure you review your applications carefully to ensure the right information is being given. Look around for what a risk manager might see as a red flag. For example, do you have a dress code? Stairs without rails? No fire extinguisher in the kitchen? Dancers on table tops? Liberal drink specials? Steps without tape to alert you?
ED: How has COVID (even if we are coming out of it) affected policies for gentlemen’s clubs? Are there signs of the pandemic affecting policies/coverage in the future (i.e. virus clauses)?
MCCULLERS: The property premiums have risen quite a bit already. I do anticipate them sharpening the verbiage to better clarify for the insured that these type of situations are not covered.
For more information, visit ctocinsurance.com or call (813) 855-0600.
