When a nightclub’s liability coverage cancels the moment a staff member touches a guest, you start to see why brokers are sounding the alarm.
Canada’s nightlife scene is shifting fast, driven by Gen Z, cashless payments, and venues that double as everything from bookstores to bars. But while the culture adapts in real time, insurance policies aren’t keeping up. Most were built for a different era, one where risks were clearer and coverage more straightforward. Today, exposures are layered and unpredictable, and a single oversight - like a missing waiver or unchecked liquor permit - can leave a business completely vulnerable.
Laura Galway has seen this disconnect widen. As a commercial broker with Mitchell & Abbott Group, she’s spent years trying to bridge the gap between outdated policies and the realities of modern nightlife. The challenge isn’t just technical - it’s cultural. The very things that define today’s venues, from spontaneous events to passive security protocols, are the same things traditional insurance models can’t properly capture.
One of the most overlooked vulnerabilities in modern nightlife is also one of the most common: technology. Galway sees it constantly. “A lot of them, there’s cashless payments. Nobody really has cash anymore,” she said.
Convenience, however, brings new exposures. Galway recalled a venue hit by card skimming after a patron slipped in with a scanner device. “I had a crime loss a little while ago because this one patron got in and had one of those scanners. He was doing their card information,” she said.
Incidents like these, she warned, aren’t one-offs. They signal a deeper issue: brokers and clients alike are unprepared for how quickly cyber threats can escalate - and how little coverage they actually have. “Cyber is so relatively new in our industry,” Galway said. “A lot of brokers are not educated enough.”
That knowledge gap extends to consumers as well, particularly younger ones who assume digital security is a given.
“We kind of have a lot of faith in people, thinking that cyberattacks are never going to happen to us. But everything’s cashless now. Cyber coverage should be pushed with everybody.”
But the digital shift is only half the story. Galway said even bigger liability gaps are hiding in plain sight - particularly when staff are forced to physically remove guests from a venue.
“As soon as you lay your hands on a patron, your liability policy is automatically canceled.” This clause isn’t widely known, but it’s a standard exclusion in many commercial policies. Unfortunately, most venues don’t realize the risk until it’s too late.
“A lot of liability policies for these venues exclude forcible ejection. That’s why we really need to make sure we’re placing clients with companies that offer that,” she said.
The problem compounds when drugs enter the picture. While alcohol can be tracked and regulated, Galway said there’s no such infrastructure for MDMA or ketamine - substances she sees turning up everywhere, even in places like laser tag arenas.
“There’s nothing put in place when it comes to consumption of recreational drugs. If someone overdoses on-site, it’s your fault. There are no coverages.”
Security measures often aren’t enough, especially when legal limits prevent thorough searches. “As a woman, I can tuck stuff underneath my boobs, and they legally can’t check me for it,” Galway said. “So, how are you supposed to stop the drugs from coming in?”
The rise of multi-use and mobile venues - bookstores serving cocktails, cafés becoming clubs - adds yet another layer of complexity. Galway finds the trend exciting but fraught, especially when policies aren’t built to account for shifting use cases.
“What the broker has to do is get these individual policies, these pop-up policies, those reliability policies,” she said.
Once liquor enters the picture, the risk model shifts dramatically. A standard venue policy might not cover anything happening offsite, or outside the primary hours of operation.
“As soon as the liquor comes up, you have to get individual policies,” Galway said. “Your venue won’t cover anything that happens outside of that establishment. That also means an additional liquor permit.”
This patchwork of policies requires brokers to anticipate every scenario - an increasingly difficult task when events are mobile, temporary, and fueled by spontaneous marketing.
Beneath all the shifting logistics, Galway sees a generational tension. Many young workers, including her daughter’s friends, are told not to intervene at all if something goes wrong. “They cannot do a single thing when someone steals. They just have to stand by and watch them leave,” Galway said.
Even harmless interactions can carry legal risk. “You can’t look at somebody weird without them taking offense. And everybody wants to sue.”
The job is no longer just about selling policies - it’s about keeping pace with cultural shifts, operational ambiguity, and exposures the industry still doesn’t fully understand. As the lines between venue, platform, and pop-up continue to blur, so does the line between what’s insurable and what’s not.
“There needs to be some kind of protection with insurance, because [at some point] it’s beyond their control.”
And in a world where the rules of nightlife are constantly being rewritten, Galway’s warning is clear: adapt - or get left behind.
