If serving alcohol is part of your business operations, you may have a lot of questions as you look into purchasing liquor liability insurance. There are inherent risks associated with any business and those risks increase greatly when liquor or other alcoholic beverages are a part of your day-to-day operations.
While there are state and local laws and regulations that aim to minimize your liability risk, accidents still happen. Fortunately, liquor liability insurance is there to help protect your business from other unforeseen risks.
Keep reading to learn more about what liquor liability insurance liability is and get answers to common questions. You’ll get a better understanding of why it’s important to have this coverage and how it benefits your business. Let’s get started!
What Is Liquor Liability Insurance?
Liquor liability insurance is a plan designed to safeguard your business from the risks of serving, selling, and furnishing alcohol.
Liquor claims have a tendency to be very expensive, especially when serious injury or death is involved. Having coverage can shield you from having to pay out-of-pocket for these claims.
What Does Liquor Liability Insurance Cover?
Liquor liability insurance is designed to cover alcohol-related claims, such as the following:
- An intoxicated customer drives home and causes a car accident that results in several serious injuries
- A wedding guest that you served alcohol to gets drunk and punches a hole through the wall at the venue
Insurance Canopy offers additional coverages that can benefit an alcohol-related business, such as assault and battery coverage, which could protect you in case one of your patrons causes bodily injury to someone else at an event.
Why Do I Need Liquor Liability Insurance?
It is a common misunderstanding that general liability insurance or business owners’ policies cover alcohol-related products and businesses. In fact, they have specific exclusions for those who sell, serve, distribute, or manufacture alcoholic products. Liquor Liability insurance is intended to cover those exclusions.
Let’s look at the differences in coverage between liquor liability insurance and general liability insurance for an alcohol-related business.
| Insurance Coverages | ||
|---|---|---|
|
Injury or Property Damage Caused By |
General Liability |
Liquor Liability |
|
Contributing to the intoxication of any person |
No |
Yes |
|
Furnishing alcohol to a minor |
No |
Yes |
|
Serving liquor to anyone under the influence |
No |
Yes |
|
Failure to train employees in proper alcohol service |
No |
Yes |
|
Reason of selling, serving, or furnishing of any alcoholic beverage |
No |
Yes |
|
Assault & Battery |
No |
Yes |
Who Needs Liquor Liability Insurance?
A few questions can help you determine if your business needs liquor liability insurance.
- Do you serve alcohol?
- Are you a catering company?
- Do you own a food truck or trailer?
- Are you a freelance bartender?
- Do you offer your clients complimentary alcoholic beverages?
- Do you sell alcoholic beverages…
- For consumption on your premises?
- As a vendor at an event or venue?
- For consumption off your premises?
- Do you furnish alcohol?
- Are you a manufacturer?
- Do you import alcoholic beverages?
- Do you distribute liquor or similar products?
If you answered yes to any of the questions, your business needs alcohol liability insurance. This can help protect your business from significant claims and lawsuits that would likely cause a small business to file bankruptcy.
These claims may also result in the business owners’ personal assets being considered to fulfill a judgment against you and your business.
Depending on your state’s dram shop laws, which determine your liability in cases where you serve an intoxicated customer or a minor, you may even be legally required to carry liquor liability insurance. Regardless of whether your state requires you to carry a liquor liability policy, having one can safeguard you from paying expensive alcohol-related claims entirely out of pocket.
How Much Is Liquor Liability Insurance?
Insurance Canopy offers an annual liquor liability policy starting at $35.42 a month, designed for businesses that sell alcohol frequently and need consistent coverage.
If you only need short-term insurance, we have an event liquor liability policy that starts at $275 for three days of coverage.
Each state has different regulations, taxes, and risks associated with selling alcohol, so your final cost will depend on which state(s) you do business in. With our convenient online application, you can get an accurate quote for your business.
Can I Get Insurance for My Bar, Restaurant, Cafe, or Tavern From Insurance Canopy?
Can I Purchase Liquor Liability Coverage Without Buying a General Liability Policy?
If you already have a general liability policy for your business with limits equal to or greater than the liquor liability policy, then you can purchase liquor liability by itself.
If you don’t currently have general liability insurance, Insurance Canopy makes it easy to bundle this coverage with liquor liability during the checkout process. Our base plan consists of the following coverages:
- $2,000,000 in general liability
- $300,000 in liquor liability
- $300,000 in damage to premises rented
- $10,000 in tools and equipment
Are My Employees Covered Under My Liquor Liability Policy?
Yes! Your liability policy will extend to W2 employees and volunteers—but only with respect to your business activities.
In other words, if one of your employees served alcohol to someone who later went on to cause an accident, your liquor liability policy would extend to them.
Can I Add Excess Liability Coverage to My Liquor Liability Policy?
No—this policy’s maximum limits are as follows:
- $1,000,000 per occurrence
- $2,000,000 aggregate
Does Liquor Liability Insurance Cover Independent Contractors?
No—Insurance Canopy’s liquor liability policy does not cover independent contractors who have contracted with a restaurant, cafe, bakery, tavern, or similar establishment.
What Is Host Liquor Liability Insurance?
Host liquor insurance is designed for anyone hosting a private event where alcohol will be served, sold, or furnished and whose normal business activities do not include alcohol. This coverage is a short-term option for private event hosts to protect them from alcohol-related claims at events such as:
- Weddings
- Corporate parties
- Birthday parties
- Retirement parties
- Anniversaries
- Luncheons or dinners
- BBQs
Our trusted partner The Event Helper will be able to assist you with purchasing a host liquor liability policy.
Safeguard Your Business With Liquor Liability Coverage
Now that you know more about liquor liability insurance and why it’s necessary for your business, you’re well on your way to protecting your business with a policy of your own!
Insurance Canopy has the expertise and variety of insurance policies to properly protect your business from liquor liability claims and lawsuits. We offer customizable protection, which you can learn more about by clicking on the links below:
- Liquor Liability Insurance
- Catering Liquor Liability Insurance
- Event Liquor Liability Insurance
- Dram Shop Liquor Liability Insurance
- Restaurant Insurance (bundle with Liquor Liability Insurance)
Disclaimer: Policies may be placed with different insurance companies. All insurance policies have specific coverages, limitations, exclusions, and conditions. Please refer to your policy and agent for exact coverages.
