Liquor liability coverage is among the policies you need when purchasing insurance for bars, restaurants, and nightclubs. This insurance can protect your establishment from lawsuits filed by third parties for liabilities like bodily injuries and property damage. Here’s everything to know about liquor liability coverage:
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What Is Liquor Liability Insurance?
Liquor liability insurance is commercial insurance you can purchase for your business. Bars, nightclubs, breweries, liquor stores, wineries, catering companies, and convenience stores all need liquor liability insurance. The policy pays for legal fees, settlements, and medical bills associated with bodily injuries and property damages. If an intoxicated patron injures or causes property damage to another customer, liquor liability insurance can cover the damages.
Some states require businesses to purchase liquor liability insurance before they apply for a liquor license or commercial lease. The District of Columbia and 44 other states also have “dram laws” that hold businesses liable for serving alcohol to intoxicated individuals. If you serve alcohol to a visibly intoxicated person, your business is responsible for damages that individual causes after they leave.
What Does Liquor Liability Insurance Cover?
Liquor liability insurance pays for specific alcohol-related claims and liabilities. Common claims include fights, slips and falls, sexual assault and harassment, and drunk driving. Your business can be liable for the actions of your patrons even after they leave the property. Liquor liability insurance only covers property damages to other people’s property. The coverage doesn’t pay for damages to your property. Here are three scenarios that liquor liability insurance can cover:
- Your restaurant serves a patron beyond the point of visible intoxication. After the service, the patron hits another car, person, or property while driving home drunk.
- A social venue hosts an event with a bring-your-own-bottle policy on alcohol. During the event, a guest becomes intoxicated and starts a fight that causes bodily injuries or property damage.
- An independent bartender serves alcohol to customers at a bar. The customers get drunk and cause damage to the bar property. Host liquor liability insurance covers such damages.
How Is Liquor Liability Different from Host Liquor Liability Insurance?
Host liquor liability pays for bodily injury and property damage when the policyholder is not a business enterprise. An example is an independent bartender or a host at a private function where alcoholic drinks are served. If someone gets drunk and causes bodily injury or property damage to another person, the host/bartender can be held liable for the damage. Host liquor liability insurance can be part of the general liability policy for companies hosting social events.
If a bar or restaurant hosts a commercial enterprise involved in the liquor trade, they need standalone liquor liability insurance. Standalone liquor liability insurance is excluded from commercial general liability insurance policies. Hosts of private functions can use the host liquor liability insurance for legal fees, settlements, medical bills, and property repair/replacement. The insurance also pays for damage to venue property, like equipment and electronics.
How Much Will Liquor Liability Insurance Cost?
You can purchase liquor liability insurance for bars, restaurants, nightclubs, wineries, distilleries, grocery stores, liquor stores, non-profit fundraising events, and more. The cost of insurance depends on the percentage of sales from selling alcohol. A bar owner is likely to pay more than a grocery store owner because alcohol sales account for a higher percentage. Other factors to consider include industry, location, coverage limits, and deductibles.
Industries like entertainment face more risks, which increase the monthly premium. The state and neighborhood can also impact premiums. Some states require businesses to have a minimum amount of coverage. Policies with higher coverage limits also feature higher monthly premiums. The quickest way to determine the cost of liquor liability insurance is by getting a quote. You can also request a policy breakdown to see what you’re paying for.
Find Comprehensive Insurance for Bars
Purchasing adequate liquor liability insurance can protect your business from claims of assault and battery, drunk driving, and property damage. Before you buy a policy, consult with a leading insurance company that focuses on serving establishments like yours.
Stick to reputable companies that provide insurance for bars and nightclubs in your area. You can check whether the company is active in your state and request a quote. The goal is to identify all areas you need to protect and determine the coverage limits, deductibles, and monthly premiums. Review each policy exhaustively to find the best coverage.