My wife and I were at the 7th Street Entry a couple of weeks back (to see The Sudden Lovelys—highly recommended), and I was struck by how quiet it was at First Ave., especially for a Saturday night. The club was still closed after a 30-foot section of ceiling fell during a show in mid-August. No one was seriously hurt, fortunately, but it did close down one of the Twin Cities’ most iconic music venues for a couple of weeks.
Because I’m at least as much law geek as music geek, a silent First Ave. got me thinking about the insurance coverage the club might have or need. That single incident is interesting (at least to an insurance lawyer) because it has the potential of triggering multiple forms of coverage that most businesses should have in place:
- Property coverage: First, there’s the cost of repairing the ceiling. This is the type of coverage most of us think about when we think about insurance. When our roof gets damaged by hail or wind, or a fire occurs in our home or business, we look to insurance to replace what was lost or damaged.
- Liability coverage: There were no serious injuries at First Ave., and from what I’ve seen there isn’t reason to think the club did anything wrong. But an incident like this could lead to lawsuits. That’s why a business should have comprehensive general liability (CGL) insurance. If the business is accused of negligence, CGL policies can cover not only payment of damages that might be awarded, but also the cost of an attorney to defend against the claim.
- Business interruption coverage: First Ave. has shows pretty much nightly, and it had to close for weeks. That’s potentially a lot of lost sales from tickets, drinks, food and merchandise. Business interruption insurance (which is usually included in a business’s property policy) can protect a company from that type of revenue loss.
Of course, with any insurance the exact coverage available depends on the terms of the policy. Certain types of losses are excluded, for example, and the amount of coverage available is defined by the policy limits.
When you suffer a loss, you should review your coverage with your agent and perhaps your lawyer. And before that loss, it pays to take the time to make sure you have purchased the full breadth of coverage your business needs.