Insurance for LGBTQ+ Bars Becoming Harder to Get

Julie Mabry’s Pearl Bar is one of only about two dozen lesbian bars in the country. She barely survived the pandemic and the economic downturn, and now she faces a new crisis. Some insurance underwriters are concerned about taking on queer bars or bars that promote drag shows and are denying them coverage.

“A couple of months ago I was checking on changing my insurance broker and was told by an underwriter that they WOULD NOT insure us due to our drag shows. I have the email to prove it,” Mabry, owner of Pearl Bar, wrote on Instagram.

“I really didn’t want to go public with this,” Mabry tells OutSmart. “I wanted people to email their legislators about how these bills are affecting us. It’s our livelihood, its people’s lives.” 

The email, shared with local media, specifically states the policy was denied due to “drag shows, drink specials, and other events.”

Texas Senate Bill 12 is one of at least 16 state bills proposed to ban drag shows around the country. Tennessee has actually enacted such a law, but a federal judge has temporarily blocked it from taking effect. Texas SB 12 went to the Texas House of Representatives’ State Affairs committee on May 10, where the committee proposed a substitution removing the mention of drag performances. Nearly 400 people signed up to speak, most of them opposed to the senate version of the bill. Attorney Paul Hill said: “Prurient interest is in the eye of the beholder, and what a district judge in Travis County thinks is prurient may not be what somebody in Lubbock County thinks it is. Parental rights and freedom are two things that the Republican Party loves, but that’s what this bill violates.” If the measure is signed into law, violators could be subjected to a civil penalty of up to $10,000.

Dallas business owner Silver Gordon spoke from a neutral position to the bill, saying that it was redundant with existing laws. He noted he previously hosted drag performances at his venue and told KXAN that his primary concern was the bill’s potential impact to bar, restaurant and nightclub revenues, an industry that he said represents $200 million in taxable revenue for the state.

“I know this legislation isn’t directed at specifically that, but it this is where things like that start,” Gordon said, “They employ tens of thousands of people in both the hospitality industry and entertainers, none of which, I believe, have any interest in harming children.”

Mabry emphasizes that Pearl Bar is a 21-and-up establishment. “We don’t allow children in here.”

“Drag shows in bars should have no bearing on insurance rates,” says a Houston insurance industry insider. “I think the insurers are just worried about the new anti-drag laws and getting sued.”

Mabry opened Pearl Bar in Houston in 2013. Today it is the only lesbian bar in the city, one of two in the entire state of Texas (Sue Ellen’s in Dallas is the other), and one of only about two dozen lesbian bars in the entire country. Lesbian bars are important for the community, both historically and culturally. And Pearl Bar is important economically for the city of Houston. Last year Pearl grossed more in sales than many of the clubs in the city. Mabry noted: “We paid close to $300,000 in TABC and sales tax alone! That’s a lot of revenue for the state, isn’t it? We are just a little ole’ lesbian bar that hosts drag shows, drag bingo and so on.” 

Angela Hale of Texas Competes, a coalition of pro-equality business leaders, told the Houston Chronicle the risk to Mabry’s business is real.

“The bill targeting drag shows is unconstitutional, anti-business and a distraction from real issues facing Texans,” Hale said, adding that it will have “many unintended and necessary consequences on business.”

This is a developing story, and will be updated as new information becomes available.