Liquor Liability Insurance
What is liquor liability insurance?
Selling and/or serving alcohol comes with certain risks, and businesses may be held responsible for incidents involving inebriated customers. Liquor liability insurance may help businesses shield themselves from many of the risks that come with serving alcohol.
Liquor liability insurance is a specialized form of commercial liability insurance. Like other liability coverages, liquor liability will normally cover legal fees and settlements that arise from covered claims.
What businesses need liquor liability coverage?
Liquor liability coverage is a prerequisite for obtaining a liquor license in most states, and the vast majority of businesses that sell and/or serve alcohol should expect to need insurance. Liquor stores, bars, wineries, breweries, restaurants, caterers and nightclubs are a few examples of businesses that likely need insurance.
Sometimes businesses only need liquor liability coverage for a short duration, such as while serving at an event. An insurance broker who specializes in liquor liability is able to help businesses get short-term coverage if it’s needed.
Additionally, businesses might need liquor liability coverage temporarily for a company event. If alcohol is consumed at a holiday party or other company-sponsored event, the employing business could be held responsible if something goes wrong. Liquor liability coverage may provide protection against incidents involving intoxicated employees, customers or guests.
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What sorts of incidents does liquor liability coverage protect against?
Liquor liability coverage might protect against a range of incidents that all involve intoxicated individuals. The following are some example scenarios where the coverage could be helpful:
- An inebriated customer trips and falls, injuring themselves on company property
- An inebriated customer sexually assaults someone in one of the restrooms
- Two inebriated customers begin physically fighting in a public space
- An inebriated event guest leaves, and causes a DUI accident on the way home
- An inebriated guest is hospitalized for moderate or severe alcohol poisoning
The exact incidents that a policy covers are dependent upon that policy’s terms, conditions and exclusions.
Does liquor liability coverage protect against harm to bystanders?
Depending on a policy’s terms, liquor liability coverage might extend to bystanders who suffer harm. Most policies will cover bystanders who are physically injured during a covered incident. Some policies will also cover psychological harm to bystanders who witness a covered incident.
Considering coverage for bystanders is particularly important, because there rarely is just one bystander who’s affected by an incident. An experienced insurance broker can help businesses make sure they have enough coverage for several bystanders to file claims.
Does general liability coverage extend to incidents involving inebriated customers?
General liability coverage normally protects against common accidents, including some that liquor liability coverage also commonly extends to. Most general liability policies won’t cover incidents caused by or involving inebriated customers, however.
General liability policies frequently have a clause that excludes claims where alcohol played a role. This is one reason why liquor liability is so important when serving alcohol.
How Much Are Premiums for Liquor Liability Coverage?
Premiums for liquor liability coverage are set according to many factors, and premiums vary as a result. The coverage tends to be affordable for the businesses that need it, though.
An insurance broker can help businesses find out exactly how much the liquor liability coverage that they need will be.
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