In good news for D.C. streateries, the city’s Office of Risk Management has dropped a proposed increase on insurance rates for businesses seeking permits to operate in outdoor spaces.

Proposed last spring, the bump could’ve cost some small businesses nearly $100,000 in additional insurance costs, according to a statement from At-Large Councilmember Robert White, who has been pushing the office to drop the increase for months. As chair of the council’s Government Operations and Facilities committee, White sent a letter to ORM earlier this month, asking officials to justify the reason for the price hike. On Sept. 16, ORM Director Jedd Ross informed White’s office that they’ve scrapped the insurance increase completely.

“The proposed insurance requirement far exceeded the insurance requirements of comparable major metropolitan areas, and I am committed to ensuring local businesses can operate in an environment without unreasonable roadblocks—particularly at this point in our pandemic recovery,” White wrote in a statement.

Spokespeople for ORM did not immediately return DCist/WAMU’s request for comment on the decision to drop the proposal.

Currently, D.C. businesses seeking a permit for outdoor space need to have a $1 million general liability insurance policy. This would cover incidents that occurred at an establishment, for example, if someone slipped and fell. But ORM’s proposal, which would’ve kicked in on Jan. 1, 2023, required bars and restaurants to have between a $1-$2 million (depending on what they serve) liquor liability policy. Liquor liability insurance is something that businesses serving alcohol can get, in addition to a general policy, that would cover claims of bodily injury or property damage that occurred as the result of an intoxicated person who was served by said establishment. For example, this type of policy could be beneficial in the case that someone drank heavily at a business, got in their car and drove, and ended up crashing.

In his letter to ORM earlier this month, White questioned what specific risks were being mitigated by requiring additional policies beyond a general liability one, and why D.C.’s rates appeared to exceed those of other cities. (In New York City, for example, businesses seeking operate outdoor areas are required to pay a minimum general commercial liability policy of $1 million per occurrence, and $2 million in aggregate.) White cited one business owner, who said that if the policy went into place their insurance costs would jump from between $24,000-$26,000 to more than $120,000.

John Guggenmos, owner of Logan Circle bar Number Nine and chair of the DC Nightlife Council, said that the proposed insurance increase would’ve cost his business an additional $15,000 in insurance.

“The amount of coverage would have been just extreme, and extreme in that there’s no other major metropolitan area that requires it,” he told DCist/WAMU. “The bottom line is that this will save the industry, the hospitality nightlife industry, hundreds of thousands of dollars….and that’s just in premiums that would have needlessly gone to [the insurance company] Hartford, outside of the district.”

Effective through Dec. 31, 2022, and now staying in place into the new year, outdoor restaurants and other businesses serving food and drink outside will be required to have a general liability policy of $1 million per occurrence and $2 million aggregate.

D.C.’s streatery program, launched in 2020 to help restaurants struggling amid indoor dining closures, was extended in the summer of 2021, with the intention of making some type of streatery plan permanent in 2022.  This past July, the Re-Open D.C. bill extended the streatery program permits again, through 2023.