After dark: nightclub cover with ClubPM

ClubPM is the Biba-approved policy to provide cover for nightclubs. The need for it became apparent when the Licensing Act 2003 caused a number of regulatory changes around late licensing.

Chief executive of the creators of the scheme, Tasker & Partners, Paul Tasker, says that it came about when some of the repercussions of the Act became clear. Not only would existing nightclubs need a different scheme to ensure effective cover, but there would also be growing demand for the product as flexible licensing hours meant more late-night venues appearing.

He says: “The measures of the 2003 Act came fully into force in November 2005. It was at that time that we spotted the opportunity to make a new product for the sector, because we believed that the insurance industry would be slow to react.”

As a result, Tasker & Partners came up with ClubPM in 2006, a bespoke product catering for nightclubs under the new regulatory regime. Tasker says: “It’s specifically designed for nightclub owners, so it covers everything they would need to have covered, including property, money, employees, customers, and special extensions such as loss of licence.”

Some of the major changes brought about by the 2003 Act were to the kind of licences available: liquor and entertainment licences were replaced with a single premises licence or club premises certificate. It also became a requirement that a member of staff holding a personal licence be present if alcohol is to be sold.

Under ClubPM’s coverage, should the policyholder lose their premises licence or club premises certificate, the insurers will pay, or make good on, the loss of depreciation in value of the interest of the insured in the premises by the forfeiture or revocation of the licence.

The scheme also recognises the problems that would be caused if an individual loses their personal licence. Tasker & Partners can provide cover on an individual basis to indemnify the policyholder for costs and expenses in connection with any appeal against personal licences being forfeited or revoked.

Another way in which the scheme ensures compliance with the 2003 Act is providing ClubSAFE, a free risk management programme, to policyholders. The programme involves a risk assessment process designed to help businesses understand, evaluate and take action on risks, and thus by effectively handling them, making savings on their premiums.

The ClubPM scheme is largely processed online. Brokers can put in the relevant information, tailoring it to their client’s specific needs, and instantly get a quotation. When they are ready to accept the policy, they are immediately issued with certificates and documentation, electronically.

Biba on board

After creating the scheme, the next step for Tasker & Partners was to get Biba to adopt it. Tasker says: “We wanted to distribute it to other insurance brokers and reiterate the brand, so we decided to try to get Biba to recognise it as an exclusive scheme.”

The company presented the scheme to Biba in 2006 and after going through a tender process, ClubPM was adopted as Biba’s exclusive scheme for late-night entertainment in early 2007.

The scheme is provided by Tasker & Partners under a three-year endorsement from Biba. It provides 15% commission to Biba members, low excesses, discounted rates and A-rated security.

As a Lloyd’s broker, Tasker & Partners placed the programme in Lloyd’s and then opened the product up to the UK broker market. It is now underwritten by Barbican.

Tasker says: “I think it was a combination of things that convinced Lloyd’s to back the product. There was the appointment from Biba, plus most of the people in our company have previous experience in this sector. We put together an argument to explain to them, through a series of different measures, that we could make this business profitable for insurers, and we have done.”

In 2008, ClubPM’s popularity saw Tasker & Partners launch two other schemes in its role as Biba-appointed provider of cover for late-night entertainment.

ClubEX caters for lap dancing clubs with an emphasis on well-run business and the safety of both entertainers and customers. It seeks to address the fact that many such establishments are refused cover from insurers on the basis of moral hazard.

Previously, lap dancing clubs were regulated under the Licensing Act 2003 and the legislation led to a significant increase in the number of such venues. There has, however, been some complication with licensing around this area more recently, with the government reclassifying lap dancing venues as sex establishments rather than entertainment venues. From April 2010, all existing lap dancing clubs will have six months to seek a fresh licence. Tasker & Partners says it is continually developing this product to make sure it can provide appropriate cover for socially responsible venues.

Nightscene, the other product developed in the wake of ClubPM’s success, is aimed at late bars. Tasker says: “With the introduction of the new Licensing Act, we identified a new type of late-night venue, which is essentially a bar or public house taking advantage of the extended opening hours afforded by the Act.

“We feel that many such premises are penalised from an insurance perspective if they are treated as traditional nightclubs, with terms offered to them that do not take account of the difference in risk.”

Tasker & Partners decided that whether a risk falls under Nightscene or ClubPM should be determined by taking a close look at the intentions and actions of those attending the venue.

Larger premises where dancing is the main form of entertainment will typically be covered by ClubPM, whereas Nightscene applies to venues where meeting, drinking and eating are the main focus.

The premiums for Nightscene are typically lower and carry lower excesses, recognising the different risks the venues face.

Before sunrise Increasingly, Tasker & Partners seems to be carving out a niche in the late-night entertainment industry. As well as widening the range of products it provides in this area, it has just announced that Biba has renewed ClubPM as an approved scheme for a further three years. Tasker says that joint marketing initiatives are being planned with Biba to create more awareness of the scheme.

Tasker & Partners is now trying to roll the product out on the Continent and has already held discussions with brokers in France and Spain.

There is also always the possibility to update the scheme and develop fresh slants on it. Tasker says: “We are scanning the horizon to identify future changes in legislation and the structure of the market so that we can continue to adapt and improve the product and the cover it provides.

“Venue owners have constantly sought to provide new forms of entertainment, for example foam parties, bucking broncos and the like, and these all pose new risks to both customers and staff. We have and will continue to tailor our product to fit the ever-changing face of the late-night market.”

For more information on ClubPM and the ClubEX and Nightscene schemes, visit www.taskerpartners.com. IT