Loss of licence insurance covers the financial hit your business takes if your premises licence is suspended or revoked by the local authority. For pubs, bars, restaurants, and hotels that rely on alcohol sales, losing that licence can mean closing the doors entirely. This cover exists to keep you afloat while you sort it out.
How Does a Premises Licence Get Revoked?
A premises licence can be reviewed and potentially revoked on several grounds. Persistent noise complaints. Repeated incidents of disorder. Failure to meet licensing conditions. A serious breach of food hygiene regulations. Even a change in local authority policy can put a licence at risk.
It does not have to be your fault. A single incident involving a customer, a complaint from a neighbouring resident, or a licensing review triggered by the police can escalate quickly. The process is administrative, not criminal, and the threshold for a review is lower than most people expect.
What Does Loss of Licence Insurance Actually Cover?
The cover typically includes a lump sum payment or ongoing financial support to cover the period while the licence is suspended or the process of appealing a revocation. The exact terms vary between insurers, but most policies cover:
- Loss of revenue during a suspension period
- Ongoing fixed costs (rent, rates, wages, utilities) that continue even when you cannot trade
- Legal costs associated with appealing the decision
- In some cases, costs related to relocating or restructuring the business
It does not cover the licence fee itself or any fines imposed by the court. And it will not pay out if the licence was lost due to deliberate illegal activity by the policyholder.
Who Actually Needs This Cover?
Any business where alcohol sales represent a significant portion of revenue. That includes pubs, bars, gastropubs, wine bars, restaurants with a drinks licence, hotels, event venues, and nightclubs. If you could not viably operate without selling alcohol, loss of licence insurance is not a luxury. It is a lifeline.
For restaurants where food is the primary revenue and alcohol is a secondary offering, the risk is lower but still worth considering. Losing a licence even temporarily can damage your reputation and cost regular bookings.
Is Loss of Licence Insurance Expensive?
It is usually included as part of a broader hospitality insurance package rather than sold as a standalone policy. The cost depends on the type of venue, the location, the claims history, and the level of cover. A village pub with a clean record will pay significantly less than a late-night bar in a city centre with a history of incidents.
As part of a combined hospitality insurance policy, loss of licence cover typically adds a modest amount to the overall premium. Compared to the cost of losing your ability to trade for weeks or months, it is a straightforward calculation.
Can You Appeal a Licence Revocation?
Yes. You can appeal to the magistrates’ court within 21 days of the decision. The licence remains in effect during the appeal period unless the police have applied for an interim step that suspends it immediately. Legal representation is strongly recommended, and the costs of instructing a licensing solicitor can run into thousands of pounds. A loss of licence policy with legal expenses cover will pick up those costs.
How to Make Sure You Are Covered
If you run a pub, bar, restaurant, or any venue with a premises licence, check whether your current policy includes loss of licence cover. If it does not, or if you are not sure, speak to a broker who understands hospitality risk.
At Cotter Insurance, we work with specialist hospitality insurers who understand seasonal trading, licensing risk, and the particular exposures that come with running a food and drink business. Our broader guide to what insurance does my business need covers the basics, and our commercial insurance page gives you the full picture of what we can arrange.
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