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Liquor Liability Insurance – Get Covered – Free Quotes

Anyone who sells alcohol on their premise, including the manufacturing, selling, and serving of liquor, is at risk of a pricey lawsuit. Many people enjoy a drink once in a while. It helps us relax and unwind. It helps turn a bland party or meal into a fun night.

However, drinking too much can lead to your customers becoming injured or involved in an accident. Following such an event, the premises from which they purchased the alcohol may be held responsible for the accident. Irrespective of whether the customer's actions were unlawful or their own responsibility.

That is where liquor liability insurance comes in handy. In this guide, you will learn the basics behind liquor liability insurance, who needs it, what it covers, and how to save money on the policy. 

What Is Liquor Liability Insurance?

Liquor liability insurance is a policy designed to protect the manufacturers and sellers of alcohol. Primarily, it focuses on the consequences of excessive drinking. Suppose a patron is involved in an accident or wrongdoing. In that case, you will be covered in the event you are held liable for their actions.

Most standard policies will not cover alcohol-related incidents. Additionally, dram shop liabilities are in effect in 43 states. These make a business liable if they serve a customer who is clearly intoxicated. Therefore, if the customer totals another person's car, you will be held responsible. Such accidents can bankrupt a healthy business. Consequently, it would be best if you had liquor liability insurance.

Who Needs Liquor Liability Insurance?

All businesses that serve alcohol can benefit from liquor liability insurance coverage. These include:

  • Bars and taverns
  • Restaurants
  • Breweries and wineries
  • Caterers
  • Grocery stores
  • Liquor stores

Remember, liquor liability only covers alcohol-related events. You still need general liability policy for all other liabilities.

What Does Liquor Liability Insurance Cover?

As mentioned, most general liability insurance policies exclude alcohol-related events if your business produces, sells, or serves alcohol. Under liquor liability insurance, you will be covered for:

  • Bodily injury You will be covered if a drunk patron causes bodily injury, either on the premises or after leaving. This will include any medical costs, loss of income, or legal fees.
  • Property damage If the intoxicated customer causes property damage while drunk, such as crashing their car into a shop, you will be covered for any damages.
  • Assault and battery – This can be added as optional coverage. It covers if a bouncer injures a customer, and also covers anybody drinking on the job. 
  • Legal fees – Any legal fees from court cases and settlements will be covered under the policy.

What to Consider When Purchasing It?

When purchasing the policy, you will want to scrutinize what is and is not covered under the agreement. For instance, review defense provisions, as they can be deemed outside the limits of the policy. Usually, legal fees and other related expenses do not reduce your policy limit. However, suppose your insurer uses proprietary forms, as opposed to the standard ISO form. In that case, your defense cost can be included in the policy limits.

Also, consider if the coverage is claims-made or by occurrence. Under a claims-made policy, you are covered for whenever a claim is made, irrespective of date. Whereas for an occurrence policy, only events occurring during a specified period are included, even once the policy has expired. 

Stress, mental anguish, and psychological injury are all considered mental injuries. Claimants, who were affected by the customer when intoxicated, can claim these as injury. However, some policies specifically exclude mental injuries from their policy. 

Finally, some insurance companies offer free risk management training to employees of bars and restaurants if they hold a policy. If you are interested in such training, enquire with your insurance provider.

How to Save Money on Liquor Liability Insurance?

Liquor liability insurance may feel like an added expense on top of all the coverage you need to buy. However, it is invaluable for most businesses serving alcohol. If the worst were to occur, it could save you a small fortune. Yet, there are a range of tips that can reduce the cost of your monthly premium. These include:

  • Bundle policies – If you have purchased other insurance, ask your insurer if they can create a policy bundle. All your insurance will be bundled together, earning you a significant discount.
  • Shop around – Although it can be cheaper to bundle, it still benefits you to shop around. Each insurance company calculates risk differently. Therefore, get multiple quotes to get the best deal on the market. 
  • Pay in full – Do not pay monthly, pay annually. By paying the entirety of your policy upfront, you can shave a significant amount off the total.
  • Reduce risks – As mentioned, alcohol-serving training is offered by some insurance companies. If your employees take the course, it can lead to lower premiums. Also, encouraging customers to purchase food with alcohol will reduce the risk of severe intoxication.
  • Up your deductibles – The quickest way to save money is by increasing your deductibles. This will reduce the cost of your premiums. However, you will need to find the extra money in the event of a claim.

If you would like to insure your business or explore the options, email us, give us a call, or fill out the free quote form on our website.

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