Vancouver’s hospitality sector is on the edge of a liability crisis. As venues push for later hours, risks are rising, and insurers are scaling back fast.
Under the new proposals, restaurants could serve alcohol until 2 a.m. daily, with downtown bars permitted to serve until 3 a.m. throughout the downtown core, and until 2 a.m. city-wide. Seated-drinking rules are already gone. For insurers, that means more alcohol, longer hours, and greater exposure. British Columbia’s proportionate liability rules offer some protection, but enforcement is ramping up - creating a volatile mix for venue owners and underwriters alike.
That shift is what Ricardo de Guzman, partner and chief innovation officer at Beyond Insurance, is watching closely. “First of all, I like to talk about the local market here in Vancouver. There’s this push for extended service hours,” he said.
But he warned the exposure isn’t just legal or financial - it’s cultural. “You have to consider how much consumption has increased. Is that going to increase for their patrons?”
Compounding the risk, a long-standing requirement that patrons remain seated while drinking was dropped more than a year ago. What seems like a minor update has significant implications for liability.
“As much as that sounds like it’ll lend to a livelier atmosphere, we have to consider whether or not this introduces some additional risks surrounding altercations, crowd control issues, and the ability for the restaurant to monitor individual alcohol consumption,” he said.
Meanwhile, compliance is tightening. Regulatory inspectors are in full force, holding venues accountable for everything from beverage service to staff training.
“There are more checks. There’s more - not surveillance - but they’re going into the restaurants and making sure that they’re adhering to the rules,” de Guzman said. “We have to expect more scrutiny on responsible beverage services, staff training, and definitely incident documentation.”
While one regulatory shift offers a measure of relief - British Columbia’s move to a no-fault auto insurance model - it hasn’t erased the exposure altogether.
“They did shift the responsibility on the venues away from joint and several liability to now more of a proportionate liability,” he said. “They still can get sued by potential injured parties, because they cannot now sue the driver for non-pecuniary damages.”
Despite some legal protection, venues must remain vigilant in documenting incidents and training staff to handle intoxication and crowd behaviour - especially as regulators step up enforcement.
New technologies and customer expectations are creating even more complexity. Third-party food delivery apps like Uber Eats and SkipTheDishes add a layer of liability that restaurants can't control but still have to defend against.
"There is an increased exposure for establishments, at least from allegations from customers that they suffered food poisoning from improper food handling or contamination," de Guzman said. "Irrespective of the actual responsibility here, they're still going to incur some defense costs."
It’s critical for restaurants to closely review their contracts with delivery platforms. Are they indemnifying the app for food-related claims? Is there a cap on liability that could leave the venue fully exposed? These contract terms - often overlooked - can significantly shift risk to the restaurant.
Even what gets poured into the glass is under the microscope. The rise of craft cocktails and experience-first dining means insurers should be taking into consideration not just what's sold but also how strong an individual drink is.
"There definitely could be missed exposures, especially with these stronger cocktails. I'm guessing it's somewhere between two and a half to three and a half ounces of hard liquor in these cocktails," de Guzman said. "Far more than your standard highball."
That leads to faster intoxication, makes monitoring more difficult, and increases the risk of over-service.
And that’s before you add the theatrics. Flaming drinks, liquid nitrogen, dry ice - even sabrage, the dramatic slicing of a champagne bottle with a sword - are becoming increasingly common. These elements introduce fire and injury risks that standard insurance applications often don’t account for.
The push for immersive, Instagrammable experiences has gone further still. Flashing lights, sensory environments, and themed decor now require venues to think about more than just fun, they need to consider accessibility and informed consent.
"We have to assume that there's some additional liability risk. Are they posting things about it? There are these flashing lights, and if you're sensitive to that, then you have to be warned," de Guzman said.
Blackout dining, escape-style meals, and strong audio-visual effects can impair awareness and create trip or injury hazards, especially in dim or crowded spaces. Proper signage and risk disclosures are now essential.
Insurers are reacting accordingly, retreating from high-liquor-risk venues such as nightclubs and late-night bars.
“It’s a challenging risk to underwrite,” he said. “Of course, underwriters are going to be very careful in selecting the good from the bad, if possible.”
Traditionally, underwriters have leaned on the ratio of food-to-liquor sales as a shorthand for risk. But de Guzman questioned whether that metric still works in an environment where a $20 cocktail tells a different story than a $5 shot.
“Does that truly reflect the liability risk?” he said. “If we’re basing the pricing on $20 cocktails, that’s going to increase that ratio versus some other bar catering to university students ordering $5 shots. That’s a much different risk profile.”
To keep up, insurers and brokers need to get smarter with their data, not just how much is sold, but to whom, and in what form.
“What types of drinks are being sold? What’s the cost per drink? Are they university students? Are these more mature individuals just having one cocktail?” he said.
Venues transitioning toward higher-priced, lower-volume models like gastropubs and cocktail lounges could present lower actual risk. Brokers should push for underwriting that focuses on patron behavior and drink volume, not just dollar sales.
Because in today’s hospitality market, where the cocktails are more potent, the lights are flashier, and the risks come from every direction, relying on old assumptions is no longer an option.
