A popular nightclub in Staffordshire has had its liability insurance pulled by an insurer, costing the business nearly £20,000 out of pocket.

After a patron claimed to have slipped on liquid on the stairs inside the nightclub and fractured her ankle, the club tried to defend the claim. However conditions included in the nightclub’s insurance policy meant the insurer could decline to indemnify the club. Ultimately without cover, the nightclub business is liable and would need to pay an estimated £19,225. This real example demonstrates the importance of following strict policy conditions, concerning CCTV in particular which are especially egregious – and how quickly a small incident can escalate into a major expense.

Why was the insurance cover invalidated?

Failure to retain CCTV footage has caused the insurer to invalidate their insurance as this breached the strict CCTV policy condition. Indeed, the club’s CCTV policy stipulations were particularly lengthy, yet the nightclub did not have appropriate surveillance at their premises, and could not provide evidence to refute the claims of the injured party.

The nightclub failed to collect documents, witness statements or surveillance at the time of the injury. This procedure is necessary and will go a long way to helping brokers defend a claim. They also argued the stairs were carpeted, which was refuted.

Case Study: Staffordshire Nightclub

• Claimant alleged she slipped on liquid on stairs and fractured her ankle which required surgery.
• The client wanted to defend the claim because they said the stairs are carpeted and any spillage would not cause a slip because it would have to have been saturated which it was not.
• Client knew about the incident but because the claim was not submitted immediately by the claimant the client did not retain CCTV footage.
• The client’s failure to retain CCTV was problematic for two reasons: Firstly, because there was no footage to support the client’s position that the claimant could not have slipped on carpeted stairs. Secondly because the policy contained a CCTV condition requiring them to retain CCTV with regard to any incidents.
• Insurers declined to indemnify the client due to breach of the CCTV policy condition.
• The client is personally liable for the claim and Insurers anticipated given the injury that the cost of the claim could be in the region of £19,225 which the client will have to pay.

NDML reiterate the importance of appropriate CCTV surveillance and camera placement.

NDML are the preferred insurance broker for nightclubs, bars, pubs and independent venues. At NDML, we have recently seen an uptick in claims being dismissed because of issues in relation to inadequate CCTV. Policyholders must understand: It is mandatory, as per the liability cover provided by insurers, that nightclubs and bars have CCTV surveillance present at all hours of the day.

This uptick is in part due to insurer’s increased stringency surrounding the CCTV policy condition. If CCTV placement is found to be insufficient, the insurer will argue the club did not adequately perform their due diligence.

Therefore NDML are strongly reminding clubs to review their CCTV surveillance and camera placement to ensure they comply with the policy requirements. Spurious accusations and false claims are, unfortunately, commonplace within the nightlife sector. CCTV surveillance is an excellent tool to combat this, hence it is recommended nightclub operators check their CCTV is in good working order every quarter.

Steve Fleming, Broking Director at NDML says:

“Insurance companies will likely expect, and may even have specific conditions within their policy, that relate to the key areas of the venue that would need to have adequate CCTV coverage – this would likely include entrances, areas where doorstaff undertake searches or other related duties, stairwells, bar areas and dancefloors. In addition, insurers would also likely require that any reported incident will have the relevant CCTV footage retained for future reference. As the above example shows, this footage can often be key in determining the extent of any legal liability that may, or may not, attach and goes along way to limiting the impact of spurious claims that can blight a venue operators claims history.”

Where do Nightclubs need to have their CCTV cameras?

The areas where nightclub premises must have CCTV surveillance include:

• Dance floor areas
• Bars and drink serving areas
• Dispensing machines
• Lobby areas and vestibules
• Areas where door security personnel are working
• Stairwells

Cameras can not be within the toilets or private cubicles, but they can be outside in hallways surveilling the movements of patrons into the toilets. Pathways need to be tracked. If an incident happens in an area which is not under surveillance that should be, this could possibly result in the invalidation of cover.

Nightclubs must comply with data protection law – The Data Protection Act orders footage to be safely stored and to be deleted when no longer necessary to be kept. Businesses must obey GDPR laws, stating that CCTV is in use at the venue. Utilise signs, which should hopefully also deter crime.

What to do when an incident occurs at a nightclub?

If an incident occurs, whether it’s within the premises or near the perimeter, it should be documented. An incident book records the date time and circumstances surrounding all accidents, and all staff member should have training on how to report an incident.

Incidents could include falls, slips trips, suspected spiking, suspected theft, antagonisation, threats, injuries, damages or violence. Witness statements and contact information is key, as well as any footage across the venue on that date.

• Save CCTV footage so it isn’t automatically deleted
• Written witness statements
• Capture any witness recordings of the incident
• Incident Reports
• Contact your broker immediately to warn of an imminent claim.

Insurance policies will most often require CCTV footage to be kept for 30 days, however some request 60 days. Fully understanding your insurance policy conditions is essential.

At NDML, it is our mission to financially protect clubs and provide guidance before, during and after a claim. Taking proactive preventative measures to limit risk is the best form of defence. By following the policy conditions correctly, nightclubs and bars give their broker the best possible ability to argue their case when a claim does arise.

Click below for more information about NDML