Pub Insurance UK: Tied Tenants, MRO & Takeovers Guide
Pub insurance is easy to buy and easy to get wrong, and the pubs that find us are usually the ones a scheme has already turned down or quietly underinsured: tied tenants paying a recharge for a policy that protects the pubco's building and nothing of theirs; new companies taking over a pub after the last operator went into liquidation; and sites declined after a fire, a flood or a licence review. This guide covers all three. If you run a tied pub, start with the recharge — it insures the landlord's asset, not your trade contents, stock, liability, loss of licence or the £60,000 kitchen you installed, and business interruption copied from a free-house template is wrong from day one. If you are taking on a pub after an insolvency, start with disclosure — the premises' claims history and your connection to the failed company decide whether you are quoted at all. Either way, a comparison journey is the wrong tool; the agreement and the history are what a specialist broker reads first.
Need a quote rather than a guide? Our pub and restaurant insurance page sets out the cover we arrange for pubs, restaurants, bars and cafés, with an indicative premium estimator.
What this guide covers
Who actually insures a tied pub?
Two parties, two policies, one building. The pub-owning business insures the structure, fixtures forming part of the building and usually loss of rent, then recharges the premium to you. You insure everything that trades: contents, stock, glass, money, liability, business interruption, loss of licence — and, critically, any improvements you have made yourself.
The split sounds obvious written down. In practice it is the single largest source of underinsurance in the licensed trade, because the word "insurance" appears on the tenant's monthly statement and stops the conversation there. The tenant sees a charge, assumes cover, and never reads a schedule they are not a party to.
That assumption survives right up until a claim, at which point three things emerge at once: the building policy names the pubco as insured and not the tenant, it does not extend to trade contents, and the sum insured was set by someone valuing an asset rather than a business.
Key facts at a glance
- The Pubs Code etc. Regulations 2016 govern tied agreements in England and Wales, enforced by the Pubs Code Adjudicator, and apply to pub-owning businesses with 500 or more tied pubs.
- Scotland is different and broader. The Scottish Pubs Code came into force on 31 March 2025 and covers every tied pub regardless of the landlord's size, enforced by its own Adjudicator.
- Scottish tied tenants have been able to request market rent only since 30 June 2025, generally once their agreement is at least halfway through.
- The market rent only (MRO) option lets a tied tenant move to a free-of-tie lease in defined circumstances — and it changes your insurance position, not just your beer price.
- The building policy is the landlord's contract. You pay for it; you are usually not the insured and cannot claim on it directly.
- Tenant's improvements — kitchens, bars, cellar cooling, trade fixtures you installed — commonly fall between the two policies entirely.
- Business interruption on a tied pub must be calculated on tied gross profit, which is lower than free-trade GP, and it must include rent as a continuing cost.
How we place licensed trade risk — The Insurability Framework™
Tied pubs are misunderstood by generalist brokers because the risk is split across two parties and one of them is not your client. Getting the boundary right is the whole job, and it is what our four-part method is built for. More on our approach to difficult and misunderstood risk.
Underwriter Intelligence
We know which questions decide a licensed-trade submission — wet-to-dry split, late licence hours, live music, accommodation, kitchen extract cleaning frequency and whether the cellar has been flooded before.
Difficult Risk Expertise
Late-hours venues, pubs with a violence or fire claim on record, flood-zone riverside sites and tenants coming out of a failed agreement are all declined by mainstream schemes. We place them Lloyd's-side.
Risk Assessment
We read the tenancy agreement, not just the proposal form — because the repairing obligation, the insurance clause and the improvements schedule determine what you actually need to insure.
Claims Advocacy
Tied pub claims involve a landlord, a tenant and sometimes two insurers arguing about a boundary. You deal with John Miller directly, and we argue where that boundary actually sits.
Taking over a pub after the last operator went bust
You can be insured, usually at a sensible price — but not through a comparison journey. A new company with no trading history, a premises with someone else's claims attached to it, and a director who may have been connected to the failed business are three separate underwriting questions. Each has to be answered before the keys change hands, because the landlord or pubco will not complete without cover in place.
A pub changing hands after a liquidation is the normal way pubs change hands, not an unusual one. Scheme underwriting still treats it as unusual. The online journey asks whether you have ever been involved in a company that entered liquidation, and a truthful "yes" ends the quote. That is an appetite problem, not an insurability problem, and it is the single most common reason a pub operator ends up talking to us.
There are three versions of the situation, and they are underwritten differently.
You are a new, unconnected operator taking on a pub whose last tenant failed
The cleanest of the three. The failure belongs to someone else; what carries over is the building. Underwriters will want the premises' claims history for the last five years, which you obtain through the landlord or pubco, and they will want to know why the last operator failed — a trading failure driven by rent, the tie or energy costs is treated very differently from a failure that followed a fire, a flood or a licence review, because the second kind tells them something about the site. Present your own experience, your funding and a realistic first-year projection. Business interruption on a pub with no trading history is set on that projection, so make it honest rather than optimistic; an inflated figure costs premium and buys nothing you can substantiate at claim stage.
Your own pub company went into liquidation and you are restarting under a new one
This is the phoenix position, and it is placeable provided it is disclosed. The proposal form question about previous insolvencies is a material one under the Insurance Act 2015 duty of fair presentation. Answer it fully: the company name, the date, the circumstances and your role. A "no" that is discovered after a loss — and insurers do check Companies House — can cut the claim proportionately if it was careless, and if it was deliberate or reckless the insurer can treat the policy as if it never existed. Either is a far worse outcome than a loading. See what happens when a policy is voided for non-disclosure.
What moves the answer from declined to quoted is context. The liquidator's report showing no misconduct and no disqualification. A clear account of why the business failed — Covid-era debt, the tie, a rent review, an energy contract — and what is structurally different this time: a different site, a free-of-tie lease, a smaller wage roll, an investor. Personal guarantees given on the old company's debts should be mentioned, because an underwriter would rather hear it from you than find it. Expect a loading in year one, typically easing over two clean renewals. Our fuller guide to insurance after insolvency or liquidation covers the mechanics for any business; the pub-specific point is that the premises licence and the DPS position must also be re-established under the new entity, and loss of licence cover will not respond to a gap you created yourself.
Your pubco or landlord is in administration
Less common but increasingly seen. The building policy is the landlord's contract, funded by your recharge. If the administrators stop paying the premium the policy can lapse, and you will not be told, because you are not a party to it. Write to the administrators and ask for written confirmation that buildings cover is being maintained and by whom. If you cannot get it, talk to your broker about contingent buildings cover on your own policy for the interim — it is not a normal purchase for a tenant, but it is available and it is cheaper than discovering after a fire that the structure was uninsured. Your Pubs Code rights, including any market rent only request in progress, survive the administration; your insurance position does not automatically.
Cover before completion, not after. Every pubco and most private landlords require evidence of public and employers' liability, and usually contents, before handover. A non-standard placement — new company, previous insolvency, a site with history — takes days through a specialist market, not the few minutes a scheme takes. Start two weeks before your completion date and send the agreement, the premises' claims history and your own history together. The operators who lose their start date are the ones who left insurance until the day before.
If the failure that concerns you is a county court judgment rather than an insolvency, the same disclosure logic applies and the placement is usually easier — see insurance for businesses with CCJs.
What does the insurance recharge on your statement actually buy?
The landlord's buildings policy, and normally nothing else. It covers the structure, landlord's fixtures and their loss of rent. It does not cover your stock, contents, liability or trading loss, and you are generally not a named insured — so you cannot claim on it directly even though you are paying for it.
| Item | Landlord's buildings policy | Your policy | Common failure |
|---|---|---|---|
| Structure & roof | Yes | No | Sum insured based on an old valuation; underinsurance triggers average |
| Landlord's fixtures | Yes | No | Dispute over what counts as landlord's versus tenant's |
| Tenant's improvements | Usually not | Only if declared | The single biggest gap — falls between both policies |
| Trade contents & equipment | No | Yes | Sums insured never updated after refit |
| Stock, including cellar | No | Yes | Deterioration after cooling failure excluded unless specified |
| Glass & sanitaryware | Sometimes | Sometimes | Both assume the other has it |
| Public & Products Liability | No | Yes | Limit below what the agreement requires |
| Employers' Liability | No | Yes — compulsory | Casual and family staff not declared |
| Business interruption | Loss of rent only, to them | Loss of your gross profit | Calculated on free-trade GP, and rent omitted as a standing cost |
| Loss of licence | No | Only if bought | Rarely purchased; catastrophic when needed |
Your Pubs Code right to ask. Both the England & Wales and Scottish codes are built on transparency and fair dealing between pub-owning businesses and tied tenants. Asking your business development manager what the insurance recharge covers, what the sum insured is, and whether any commission is included is an entirely ordinary request. Put it in writing, keep the answer, and give it to your broker. It takes ten minutes and it is the fastest way to find out whether you are underinsured.
What should a pub insurance policy actually include?
Fourteen sections, of which most pubs hold about eight. The ones routinely missing — stock deterioration, loss of licence, legal expenses, money and terrorism — are cheap individually and expensive collectively when the claim comes. Use the table as a schedule check against what you currently hold.
| Cover | What it does | The pub-specific point |
|---|---|---|
| Buildings | Reinstatement of the structure after fire, flood, storm, escape of water, impact and malicious damage. | On a tied pub this is the landlord's policy. On a freehold it is yours, at rebuild cost, and listed or non-standard construction changes the figure sharply. |
| Trade contents & tenant's improvements | Furniture, equipment, bar and kitchen fit-out at replacement value. | Improvements you funded in someone else's building must be declared as a separate item or they are on neither policy. |
| Stock & cellar deterioration | Stock against insured perils, plus spoilage after cooling plant failure or power cut. | Deterioration is an extension, not a default. A full cellar can easily run to five figures of stock. |
| Money | Cash on the premises, in transit to the bank and in the safe, including assault of staff carrying it. | Late-hours wet-led sites hold more cash than the standard limit assumes. Check the safe and overnight figures. |
| Glass & signs | Fixed glass, sanitaryware and external signage. | Frequently assumed to sit on the other party's policy. Confirm which. |
| Public & products liability | Injury to customers and third parties, damage to their property, and the food and drink you serve. | Your agreement usually specifies the limit — commonly £5m, sometimes £10m. Late hours and live music are the primary rating factors. |
| Employers' liability | Injury or illness to staff. Compulsory: £5m legal minimum, £10m standard. | Casual, family and one-night event staff all count towards the wage roll. Under-declaring is a coverage problem. |
| Business interruption | Loss of gross profit and continuing costs while you cannot trade after an insured loss. | Calculate on tied gross profit where applicable, include rent and the recharge as standing costs, and set 18–24 months not 12. |
| Loss of licence | Loss of profit and business value if the premises licence is suspended or revoked through circumstances outside your control. | The most under-bought cover in the trade. Essential for anything trading past midnight. |
| Legal expenses | Legal costs for employment disputes, property disputes, licensing hearings, tax investigations and contract disputes. | A licensing review hearing is a legal proceeding. So is a dilapidations argument at the end of a lease. Check both are inside the policy wording. |
| Terrorism | Property damage and business interruption following an act of terrorism, which standard policies exclude. | Town-centre and event-hosting venues should hold it. The Terrorism (Protection of Premises) Act 2025 — Martyn's Law — brings premises with a capacity of 200 or more into a preparedness duty as it comes into force, which underwriters will ask about. |
| Equipment breakdown | Sudden mechanical or electrical failure of cellar cooling, kitchen equipment, air handling and tills. | The breakdown itself is not covered by contents. Pair it with deterioration of stock, because one causes the other. |
| Personal accident & assault | Fixed benefits to you or staff following injury, including assault at work. | Relevant for door staff you employ directly and for late-hours sites generally. |
| Goods in transit | Stock and equipment while being collected or moved. | Only needed if you collect your own stock — which is exactly what happens the day you go free-of-tie. |
Two of these attract more questions than the rest. Terrorism cover is bought through the Pool Re arrangement via your insurer, and pubs frequently decline it as irrelevant to them; a town-centre wet-led venue, or any pub hosting events, is precisely the profile the cover exists for, and the premium is modest against buildings and BI sums insured. Legal expenses is treated as a bolt-on and rarely read, yet for a tenant on a repairing lease the property disputes section can be worth more than the rest of the policy at the end of the term. Read the wording for the specific sections rather than the headline.
Who pays if the kitchen you installed burns down?
You do, unless you specifically insured it. Tenant's improvements — the kitchen, the bar, cellar cooling, air handling, trade fixtures you funded — are not landlord's property and not automatically part of your contents sum insured. They have to be declared and valued as a separate item, and almost nobody does it.
This is the gap that turns a survivable fire into the end of a business. A tenant takes on a tired pub, spends £60,000 to £150,000 making it tradeable, and insures "contents" at a figure that reflects tables, chairs and a till. The building is insured by the pubco at reinstatement value for the structure. The fit-out that made the pub work belongs to neither figure.
Three practical steps close it. Keep the invoices for everything you install. Declare tenant's improvements as a separate sum insured at replacement cost, not written-down value. And check the lease for what happens to those improvements at the end of the term — because if they revert to the landlord, you are insuring an asset you will eventually hand over, which changes nothing about the need to insure it in the meantime.
The conversation I dread is the one that starts "the pubco insures the building, so I only need a small policy." It is almost always followed, three questions later, by a description of a kitchen the tenant paid for out of their own savings.
What makes it worse is that it is entirely fixable and costs very little. Tenant's improvements cover is not expensive — it is a sum insured on a schedule. The reason it is missing is not price. It is that nobody ever explained that the pubco's policy and the tenant's policy have a seam running between them, and that everything the tenant personally funded lands directly on that seam.
If you have spent your own money on that building, write down what you spent and tell your broker. That is the whole fix.
Why is business interruption wrong on almost every tied pub?
Because the gross profit figure is copied from a free-house template. Tied tenants buy beer above open-market price, so tied gross profit is structurally lower — insure on free-trade GP and you overpay for cover you cannot claim. Then there is the opposite error: omitting rent, which continues while you are shut.
Business interruption is the cover that decides whether a pub reopens after a fire or flood, and it is the one most often set by guesswork. Two tied-specific issues compound the usual problems.
- The tie suppresses gross profit. Your wet margin is lower than a free house on the same turnover because of the price you pay for tied product. Insuring on a free-trade assumption means paying premium for a sum you can never substantiate at claim stage.
- Rent does not stop. It is a standing charge that continues while the pub is closed, and it must be inside the sum insured. So do business rates, insurance recharge, and any tie-related minimum purchase obligation that survives closure — check the agreement.
- The indemnity period is usually too short. Twelve months is the default and it is rarely enough for a listed or unusual building, or where planning and licensing conditions slow reinstatement. Eighteen to twenty-four months is a more honest figure for most pubs.
- Trade is seasonal. A fire in November costs far more than the same fire in February. Declaration-linked cover with a reasonable uplift handles this better than a flat annual figure.
And if you go free-of-tie, it all changes. Exercising a market rent only option alters your gross profit, your rent and often your repairing obligations at the same moment. A BI sum insured that was right under the tie is wrong the day the MRO lease starts — usually understated, because your wet margin improves. Tell your broker before completion, not at the next renewal.
Which cover does your agreement actually need?
It depends on what you hold. A tenancy at will, a three-year tenancy, a full repairing lease and an MRO free-of-tie lease put very different obligations on you. Select the closest match below.
Tied agreement cover checker
Seven common licensed-trade positions. If you are unsure which you hold, the front page of your agreement will say. For how cover is structured across the sector, see our pub and restaurant insurance page.
Taking over a pub after an insolvency, or restarting after your own
New entity, no trading history, and a premises or a director with a past. Disclosure decides the outcome; timing decides whether you open on the day you planned.
- CRITICALDisclose any previous insolvency you were connected to, in full, on the proposal — non-disclosure can void the policy
- ESSENTIALObtain the premises' five-year claims history from the landlord or pubco before you apply
- CRITICALLiability and contents evidenced before completion — the landlord will not hand over without it
- ESSENTIALBusiness interruption on an honest first-year projection, with rent and the recharge as standing costs
- RECOMMENDEDRead insurance after insolvency or liquidation before you fill in anything
Short tied tenancy (typically 3–5 years)
Landlord handles the building and most external repair. Your exposure is trading, liability and anything you have installed yourself.
- LEGALEmployers' Liability £10m — including casual, family and event staff
- ESSENTIALPublic Liability at the limit your agreement specifies, commonly £5m
- CRITICALTenant's improvements declared separately at replacement cost
- ESSENTIALStock including cellar deterioration after cooling failure
- CONSIDERAsk in writing what the insurance recharge covers
Tied lease on full repairing terms
The heaviest tied position. You carry the repairing obligation as well as the tie, which means dilapidations sit on you at the end of the term.
- CRITICALSchedule of condition agreed at the start — it caps the dilapidations claim
- ESSENTIALConfirm whether you or the landlord insures the building under the lease
- CRITICALTenant's improvements, and what happens to them at lease end
- ESSENTIALBusiness interruption including rent, rates and the recharge as standing costs
- RECOMMENDEDLegal expenses with a property disputes section
Free-of-tie or market rent only lease
You buy on the open market and pay a market rent. Better margins, and usually a heavier set of obligations transferred to you.
- CRITICALRecalculate business interruption — your gross profit has changed
- CRITICALCheck whether the building insurance obligation moved to you
- ESSENTIALRepairing obligations reviewed; MRO leases are often fuller repairing
- ESSENTIALGoods in transit if you now collect your own stock
- RECOMMENDEDTell your broker at completion, not at renewal
Freehold free house
You own the building and the business. One policy, one insured, no boundary argument — and the whole reinstatement exposure is yours.
- CRITICALBuildings sum insured at current reinstatement cost, not market value
- CRITICALListed status and non-standard construction declared — both change the figure
- ESSENTIALIndemnity period of 18–24 months for anything hard to rebuild
- ESSENTIALFlood and subsidence position checked properly for riverside sites
- CONSIDERIndex-linking and an annual reinstatement review
Managed house operator
You operate on behalf of the owner with employed staff. Employment exposures dominate and the licence usually sits with you.
- LEGALEmployers' Liability £10m; wage roll accurate including bank staff
- ESSENTIALManagement liability and employment practices exposure
- CRITICALLoss of licence — the DPS and premises licence sit with the operation
- ESSENTIALMoney and staff assault cover for late-hours trading
- CONSIDERContractual liability under the operating agreement reviewed
Pub with letting rooms
Two businesses under one roof, and insurers rate them separately. Guest accommodation changes the fire risk and the liability profile.
- LEGALFire risk assessment covering sleeping accommodation
- ESSENTIALGuests' property and personal effects cover
- CRITICALDeclare the room count — undeclared accommodation is a coverage issue
- ESSENTIALBI reflecting both wet, food and accommodation income streams
- CONSIDERSee our food operation guidance if you also do delivery
What should you check before you sign, or before renewal?
Nine checks, all free, all in documents you already have. Every unchecked box below is exposure you are carrying without pricing it — and most of them are settled by reading the agreement rather than buying anything.
Tied pub pre-signature checklist
Tap each item you can honestly say is in place.
How exposed is your agreement?
Two factors dominate: what you hold, and how much of your own money is in the building. Select both for an indicative exposure tier and what to prioritise.
Tied pub exposure assessor
What drives your exposure and your premium?
Thirteen factors, and most are within your control. What you hold, what you have installed, when you close and what you serve matter far more than turnover — and the right-hand column below is real work rather than paperwork, because each item shifts exposure as well as price.
| Driver | Why it matters | What to do about it |
|---|---|---|
| Agreement type | Tenancy, repairing lease, MRO and freehold put wildly different obligations on you, including who insures the building. | Read the insurance and repairing clauses and give both to your broker before renewal. |
| Tenant's improvements | Your capital in someone else's building, sitting between two policies. | Itemise, value at replacement cost, declare separately. Keep invoices. |
| Wet-to-dry split | Food-led pubs carry kitchen fire and food safety exposure; wet-led carry violence and late-hours risk. Insurers rate them differently. | Give an accurate percentage. Guessing high on food when you do very little invites the wrong rating. |
| Closing hours | Post-midnight trading is one of the biggest liability rating factors in licensed trade. | Declare actual closing times including seasonal extensions. Door supervision helps. |
| Kitchen extract cleaning | Grease build-up in extract ducting is a leading cause of serious kitchen fires, and cleaning frequency is usually a policy condition. | Schedule it, keep the certificates, and match the frequency stated on your schedule. |
| Electrical & gas certification | The other condition insurers enforce at claim stage. Expired certificates undermine an otherwise good claim. | Diarise EICR and gas safety renewals independently of your insurance renewal. |
| Cellar & stock control | Cooling failure spoils stock; flood in a cellar is common and expensive. | Confirm deterioration of stock is covered and that cellar contents are inside the sum insured. |
| Flood & watercourse proximity | Many older pubs sit beside rivers. This can move a placement from scheme to specialist market on its own. | Know your flood zone, and present any resilience work you have done. |
| Building age & listing | Listed and non-standard construction raise reinstatement cost far above market value and lengthen rebuild time. | Reinstatement valuation, and an indemnity period that reflects real rebuild timescales. |
| Entertainment & events | Live music, DJs, sport screenings and beer festivals change crowd profile and liability exposure. | Declare them. See our event liability guidance for larger occasions. |
| Claims & licence history | Five years of claims experience is standard, and a licence review or violence incident is material. | Present claims with the corrective action taken — the fix is worth more than a bare record. |
| Insolvency history | A previous liquidation — the last operator's, or your own — is a material fact and a scheme decline. It is not a specialist-market decline. | Disclose it in full with the liquidator's report and a plain account of what is different this time. See the insolvency section above. |
| Accommodation | Letting rooms create sleeping-risk fire exposure and guest property liability, rated separately from the pub. | Declare the room count. Undeclared accommodation is a coverage problem, not a pricing one. |
Does going free-of-tie change your insurance?
Yes, in three ways at once. Your gross profit rises because you buy on the open market, so business interruption needs recalculating upward. Your rent changes. And MRO leases frequently transfer more of the repairing and insuring obligation to you — sometimes including the building itself.
The market rent only option is the centrepiece of both UK pubs codes. In England and Wales the Pubs Code etc. Regulations 2016 give qualifying tied tenants the right to request an MRO offer at defined trigger points, enforced by the Pubs Code Adjudicator, and apply to pub-owning businesses with 500 or more tied pubs. In Scotland the position is broader: the Scottish Pubs Code came into force on 31 March 2025, applies to every tied pub regardless of the landlord's size, and MRO rights became available from 30 June 2025, generally once an agreement is at least halfway through its term.
From an insurance standpoint the moment of transition is what matters, because three variables move together and nobody tells the broker.
- Recalculate business interruption. Free-of-tie wet margin is better, so your gross profit sum insured is probably now understated. Underinsurance is applied proportionately at claim stage — this is not a technicality.
- Re-read the insurance clause. Some MRO leases move the buildings insurance obligation to the tenant. If that has happened and you have not noticed, the building may be uninsured.
- Re-check the repairing obligation. A fuller repairing lease means dilapidations exposure at the end of the term, and makes a schedule of condition considerably more valuable.
Practical timing. Tell your broker when the MRO offer is agreed, not when the next renewal comes round. The gap between completion and renewal can be eleven months, and every day of it is spent on sums insured that describe a business you no longer run.
What does losing your licence actually cost?
Everything, and quickly. A premises licence review triggered by police or a licensing authority can suspend or revoke your ability to trade, while rent, rates and the tie obligation continue. Loss of licence insurance covers the resulting loss of profit and the value of the business — and almost nobody buys it.
Under the licensing regime a responsible authority — police, environmental health, trading standards, the fire authority — can apply for a review of a premises licence. Outcomes range from added conditions through suspension to revocation, and a review can follow a single serious incident: an assault, an underage sale, persistent noise complaints, or a drugs issue on the premises.
The financial mechanics are brutal for a tied tenant in particular. If you cannot trade you cannot generate the wet turnover the tie assumes, but the rent does not pause and the agreement does not lapse. A pub that cannot sell alcohol has almost no going-concern value, so the loss is not merely the trading period — it is the business.
Loss of licence cover is inexpensive relative to that exposure and is routinely omitted, largely because it is never raised. Two riders. It responds to loss of licence through circumstances outside your control, not to a licence lost through your own deliberate breach. And it depends on the personal licence and designated premises supervisor arrangements being properly maintained — so keep the DPS position current and documented.
What do real tied pub claims look like?
Three illustrative composite scenarios drawn from the kinds of placements and claims seen in this sector. They are not real cases, and the figures are realistic rather than actual. The pattern is consistent: the physical loss is insured, and the uninsured element is whatever sat on the seam between the two policies.
Claim 1 — the extract fire and the kitchen nobody insured
A food-led tied pub suffered a fire originating in the kitchen extract canopy, spreading into the ceiling void. The pubco's buildings policy responded to the structure. The tenant had installed the entire kitchen four years earlier at their own cost.
- Buildings claim (landlord's policy): £186,000 — settled
- Tenant's contents claim: £41,000 against a £45,000 sum insured
- Tenant's improvements — kitchen fit-out: £78,000, uninsured
- Business interruption: paid, but on a gross profit figure copied from a free-house template and reduced proportionately for underinsurance
- Outcome: tenant surrendered the agreement nine months later.
Lesson: the fire was insured. The business was not. A separate tenant's improvements sum insured would have cost a small fraction of the premium and closed a £78,000 hole.
Claim 2 — the cellar flood and the deterioration exclusion
A riverside tied pub flooded to cellar depth after prolonged rain. Water reached the cooling plant and the stock. The buildings policy dealt with the fabric; the tenant's policy covered contents but had never had stock deterioration added.
- Stock loss: £14,500 of beer, wine and spirits
- Cellar cooling plant: £9,200, disputed as landlord's fixture versus tenant's improvement
- Closure: five weeks, over an August bank holiday
- Business interruption paid: £21,000 against an estimated £34,000 actual loss — the annual sum insured did not reflect seasonality
- Renewal impact: flood excess increased substantially; moved to a specialist market.
Lesson: two avoidable gaps. Stock deterioration following cooling failure is an add-on that has to be asked for, and a flat annual BI figure does not protect a seasonal trade. Declaration-linked cover would have closed most of the shortfall.
Claim 3 — the assault, the review and the licence
A wet-led tied pub trading to 1am had a serious assault in the smoking area. The injured customer claimed; the police applied for a review of the premises licence, which was suspended for three months pending conditions being met.
- Public Liability settlement: £62,000 plus £24,000 defence costs
- Three months' closure: rent and rates continued at roughly £4,100 per month
- Loss of licence cover held: none — the entire trading loss was uninsured
- Reinstatement conditions: door supervision and CCTV upgrade, £11,000
- Renewal impact: liability premium up 70%, held for two renewals.
Lesson: the liability claim was covered and manageable. The uninsured loss was the closure, and loss of licence cover would have addressed it for a modest premium. For late-hours wet-led sites this is the most under-bought cover in the trade.
How should you handle a claim on a tied pub?
Notify both insurers, not one. A tied pub loss usually touches the landlord's buildings policy and your own policy simultaneously, and the two claims proceed separately. The mistake that costs money is assuming the pubco is handling it.
- Make the site safe and stop the loss spreading. Isolate services, move undamaged stock, secure the premises. Reasonable costs incurred to prevent further damage are normally recoverable.
- Notify your own broker the same day. Do not wait for the landlord. Your policy has its own notification condition and your losses — stock, contents, improvements, trading — are yours to claim.
- Tell the pub-owning business in writing. They need to notify their buildings insurer. Ask for confirmation that they have, and keep it.
- Photograph everything before you clear up. Wide shots and close-ups, including the ceiling void, the cellar and the extract system. This evidence disappears within hours of a clean-up starting.
- Do not dispose of damaged property. Loss adjusters need to inspect. Move it and store it if you must, but keep it until you are told otherwise.
- Pull your paperwork together. Stock records, till and EPOS reports, last three years' accounts, the tenancy agreement, improvement invoices, extract cleaning and electrical certificates.
- Establish the boundary early. Agree in writing with the landlord which items are landlord's fixtures and which are tenant's improvements before either adjuster forms a view. This is where money is won and lost.
- Start the business interruption claim immediately. Track the trading loss from day one, keep evidence of continuing costs including rent, and do not let the BI element trail behind the material damage claim.
John Miller — Director & Principal Broker
John is the founder of Miller & Partner Limited, a specialist commercial insurance broker based in Mumbles, Swansea, with direct access to Lloyd's and specialist MGA schemes. Miller & Partner Limited is an Appointed Representative of Gauntlet Risk Management Ltd, which is authorised and regulated by the Financial Conduct Authority. FS Register FRN 1029698. He has 13+ years in commercial insurance, including roles as top Account Executive at Brown & Brown and top salesperson at AXA.
Licensed trade is a long-standing part of the book. John places tied tenancies, free-of-tie leases, freehold free houses and late-hours venues — including sites that mainstream schemes have declined after a fire, a flood, a licence review or a previous operator's insolvency. More about John.
Glossary of tied pub terms
- Average (underinsurance)
- The principle that if a sum insured is less than the true value at risk, the insurer reduces the settlement proportionately — even on a partial loss.
- Business development manager (BDM)
- Your day-to-day contact at the pub-owning business, and the person to ask in writing what the insurance recharge covers.
- Declaration-linked cover
- Business interruption cover based on a declared estimate with a built-in uplift, rather than a fixed sum. Better suited to seasonal trade.
- Designated premises supervisor (DPS)
- The named personal licence holder responsible for authorising alcohol sales at the premises. Continuity matters for loss of licence cover.
- Dilapidations
- The landlord's claim at the end of a lease for breaches of the repairing obligation. Capped in practice by an agreed schedule of condition.
- Full repairing and insuring (FRI)
- A lease placing repair and, sometimes, insurance obligations on the tenant. Read the insurance clause — it varies more than people assume.
- Gross profit (insurance definition)
- Turnover less specified variable costs, as defined by the policy. Not the same figure as your accountant's gross profit, and lower under a tie.
- Indemnity period
- The maximum period business interruption will pay for. Twelve months is the common default and is frequently too short for a pub.
- Landlord's fixtures
- Items forming part of the building and belonging to the owner. The dividing line between these and tenant's improvements decides who claims.
- Market rent only (MRO)
- The statutory right of a qualifying tied tenant to move to a free-of-tie lease at market rent, under the England & Wales or Scottish pubs codes.
- Premises licence review
- A process by which a responsible authority can seek conditions, suspension or revocation of a premises licence following a serious incident.
- Pubs Code Adjudicator
- The statutory regulator enforcing the pubs code. England and Wales and Scotland each have their own.
- Schedule of condition
- A dated photographic record of the property's state at the start of a lease. The single most valuable document a repairing tenant can hold.
- Tenant's improvements
- Fit-out and trade fixtures funded by the tenant. Not covered by the landlord's buildings policy and not automatically inside a contents sum insured.
- Tie
- The obligation to buy specified drinks from the pub-owning business. It suppresses wet gross profit, which is why BI must be calculated on tied figures.
- Wet-to-dry split
- The proportion of turnover from drink versus food. A primary rating factor, because it determines whether kitchen fire or late-hours liability dominates.
Frequently asked questions
The questions below cover the tied relationship, taking over a pub after an insolvency, and what changes on MRO. For how cover is structured across the sector generally, see our pub and restaurant insurance page.
Yes, and if you had no connection to the failed company it is a routine specialist placement rather than a difficult one. What the underwriter needs is the premises' claims history for the last five years, which you obtain through the landlord or pubco, and an understanding of why the last operator failed — a rent, tie or cost failure says nothing about the building, whereas a failure that followed a fire, flood or licence review does. Add your own trade experience, your funding and a first-year projection you can defend, because business interruption on a new entity is set on that projection. The practical constraint is time: the landlord will want liability and contents evidenced before handover, and a non-standard placement takes days rather than minutes. Start at least two weeks before completion.
Yes, provided you disclose it. The proposal form asks whether you or any director has been involved in a company that entered liquidation or administration, and under the Insurance Act 2015 that is a material fact — answer it fully, with the company name, date, circumstances and your role. Online schemes will decline on a "yes", which is an appetite decision; specialist underwriters will quote on it, usually with a loading in the first year that eases over two clean renewals. What helps most is context: the liquidator's report showing no misconduct or disqualification, a plain account of why the business failed and what is structurally different now, and any personal guarantees on the old debts mentioned up front. What ends the conversation is a "no" that Companies House contradicts: a deliberate or reckless misrepresentation allows the insurer to avoid the policy from inception after a loss, and even a careless one can reduce the claim. Our guide to insurance after insolvency or liquidation covers the mechanics in detail.
Possibly not, and you will not be told either way, because the buildings policy is the landlord's contract and you are not a party to it even though your recharge funds it. Write to the administrators and ask for written confirmation that buildings cover is being maintained, by which insurer, and that the premium is paid. If you cannot get a straight answer within a few days, ask your broker about contingent buildings cover on your own policy for the interim period; it is an unusual purchase for a tenant but it is available and it is a fraction of the cost of discovering after a fire that the structure was uninsured. Your Pubs Code rights, including any market rent only request already made, are unaffected by the administration. Your insurance position is not automatically protected, which is why you have to ask.
Yes, and the two barely overlap. The pub-owning business insures the structure, its own fixtures and its loss of rent — an asset policy protecting an asset owner. It does not cover your trade contents, your stock, your public or employers' liability, your business interruption, or the fit-out you funded. You are usually not even a named insured on it, so you cannot claim on it directly despite paying the recharge. Employers' Liability alone is compulsory the moment anyone works for you, including casual and family staff. Think of it as two policies with a seam running between them: the landlord's covers the building, yours covers the business, and everything you personally paid for tends to land exactly on the seam unless someone deliberately puts it on one side or the other.
It is the pub-owning business passing on the cost of the buildings insurance they arrange for the property you occupy. It is a legitimate charge under most tied agreements — but it is worth understanding what it buys, because tenants routinely assume it covers more than it does. Both the England and Wales and Scottish pubs codes are built on transparency and fair dealing between landlord and tied tenant, so asking your BDM in writing what the recharge covers, what the sum insured is, and whether any commission is included is a perfectly ordinary request. Get the answer in writing and give it to your broker. If the buildings sum insured looks low for the property, that is the landlord's problem in a total loss — but it becomes yours if the pub cannot reopen.
Only if you specifically insure them, which is why this is the biggest uninsured loss in the tied trade. If you have installed a kitchen, rebuilt the bar, fitted cellar cooling or added air handling at your own cost, that work is not landlord's property and is not automatically inside a standard contents sum insured. It needs listing as a separate item, valued at replacement cost rather than written-down book value. Keep the invoices — they are the evidence that establishes both ownership and value. Also check what the lease says happens to improvements at the end of the term, because in many agreements they revert to the landlord. That does not remove your need to insure them while you are trading; it just means you are protecting a period of use rather than a permanent asset.
On your actual tied gross profit as the policy defines it, not on a free-house template — and with rent included as a continuing cost. The tie suppresses your wet margin because you buy above open-market price, so a sum insured lifted from a free-trade example means paying premium for a figure you could never substantiate. Equally common is the opposite error: forgetting that rent, business rates and the insurance recharge all continue while the pub is shut. Then set the indemnity period honestly. Twelve months is the default and it is rarely enough for an older or listed building where reinstatement and licensing take time; eighteen to twenty-four months is more realistic. If your trade is seasonal, declaration-linked cover protects you better than a flat annual figure.
In England and Wales, the Pubs Code etc. Regulations 2016 govern the relationship between tied tenants and large pub-owning businesses, enforced by the Pubs Code Adjudicator. It applies to landlords with 500 or more tied pubs, so smaller pub companies fall outside it. Scotland is broader: the Scottish Pubs Code came into force on 31 March 2025 under the Tied Pubs (Scotland) Act 2021, and applies to every tied pub regardless of the landlord's size, with its own Adjudicator. Both codes cover fair dealing, transparency of costs, rent assessment and the market rent only option. Neither is an insurance regulation — but both give you a right to information about what you are being charged, which is exactly what you need to establish whether the buildings cover you are funding is adequate.
Substantially, and in three ways simultaneously. Your gross profit rises because you buy on the open market, so your business interruption sum insured is probably now understated — and underinsurance is applied proportionately, so this is not a technicality. Your rent changes, which alters the standing charges inside that same calculation. And MRO leases frequently transfer more of the repairing and insuring obligation to the tenant, in some cases including the buildings insurance itself; if that has happened and nobody noticed, the building may be uninsured. The practical advice is simple: tell your broker when the MRO offer is agreed, not at the next renewal. The gap between completion and renewal can be the best part of a year, spent on sums insured describing a business you no longer run.
If you trade late or wet-led, seriously consider it — it is the most under-bought cover in the licensed trade. A responsible authority such as the police or environmental health can apply for a review of your premises licence following a single serious incident, and the outcome can be added conditions, suspension or revocation. A pub that cannot sell alcohol has almost no going-concern value, and for a tied tenant the rent, rates and agreement all continue regardless. Loss of licence cover responds to the resulting loss of profit and business value where the licence is lost through circumstances outside your control — it will not respond to a licence lost through your own deliberate breach. Keep your DPS and personal licence arrangements current and documented, because insurers will look at them. If you run a wine bar, cocktail bar or late-night bar rather than a traditional pub, see our bar insurance page.
Only if deterioration of stock has been added, and it very often has not. A standard contents and stock section responds to damage from an insured peril such as fire, flood or theft. Beer spoiling because the cellar cooling failed is not physical damage in that sense — it is deterioration, and it needs a specific extension. The extension typically covers spoilage following breakdown of the cooling plant or an unexpected power failure, subject to conditions about maintenance. Given that a full cellar can easily run to five figures of stock and that cooling plant in older pubs fails regularly, this is one of the cheapest meaningful improvements you can make to a licensed trade policy. Check the schedule for the word "deterioration" and check who owns the cooling plant while you are at it.
Read the insurance clause in your agreement, because the number is usually specified and pub-owning businesses do check. £5m Public Liability is the common requirement for licensed premises and some agreements ask for £10m, particularly for larger sites or where events are permitted. Employers' Liability — £10m is standard, £5m the legal minimum — is compulsory by law from the moment anyone works for you — and that includes casual bar staff, kitchen porters taken on for a busy weekend, family members who help out, and door staff you engage directly rather than through a contractor. Under-declaring your wage roll to save premium is a false economy that surfaces at exactly the wrong moment. If you host beer festivals or live music, declare those separately; they change the crowd profile and the rating.
Usually yes, though it may need a specialist market rather than a scheme. Flood history attaches to the property rather than to you, so a previous tenant's claim will surface in an insurer's own data even though it has nothing to do with your trading record. What improves the outcome is evidence: know your flood zone, document any resilience work done to the building — flood barriers, raised plant, tanking, relocated electrics — and present the claims history with an explanation rather than leaving it to be discovered. Expect a higher flood excess, and check whether flood is covered at all rather than assuming. Older riverside pubs are among the most commonly declined risks in the trade, and being refused by a comparison journey tells you nothing about whether the risk is placeable.
Yes. Licensed trade is a claims-heavy sector and specialist underwriters expect to see a history — what decides the outcome is how you present it. Set out what happened, what caused it, what changed afterwards and how the change is evidenced: new extract cleaning frequency with certificates, door supervision introduced, CCTV upgraded, closing times pulled back, staff retrained. An operator who can produce that will be quoted; one who describes it as bad luck usually will not. Expect a loading, typically recovering over two clean renewals. If mainstream schemes have already refused you, that is an appetite problem rather than an insurability one — see business insurance with a claims history and insurance for businesses refused cover.
Ask whether they want to read your tenancy agreement. A broker who only asks for turnover and postcode is going to sell you a licensed trade policy that ignores the two things that actually matter — the insurance clause and the improvements position. Then ask two follow-ups: how they would calculate business interruption on a tied gross profit, and what happens to your sums insured if you exercise a market rent only option. Miller & Partner approaches every placement through the Insurability Framework™ — underwriter intelligence, difficult-risk expertise, risk assessment and claims advocacy — and licensed trade, including late-hours and previously declined sites, is long-standing ground for us. Send us the agreement and your current schedule and we will tell you plainly where the gaps are.
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