Does Your Business Need Liquor Liability Insurance?

There is an increased level of responsibility and liability involved with selling alcohol, as opposed to anything else that an establishment may serve. Due to the unpredictable nature of individuals who drink too much, there’s a lot of unforeseen damage that can be caused by intoxicated people. Any business that manufactures, distributes, sells, or serves alcohol needs to be aware of the heightened risk to which they’re subjecting themselves.

When cases involving injuries subsequent to excessive alcohol use are taken to court, juries will often scrutinize the source from which the alcohol was obtained, and the injured parties are usually awarded large cash sums.

What is Liquor Liability Insurance?

Coverage for liquor liability is an endorsement that business owners can choose to add onto their existing liability policies. The amount that the add-on will cost depends on the size of the establishment and the number of people served on average. Most bars and restaurants in the US are required to carry liquor liability insurance if they serve alcohol. It’s important for business owners to be aware that liquor liability is not covered under general commercial liability.

Businesses that require liquor liability insurance include:

  • Bars/Taverns
  • Restaurants
  • Social/Fraternal clubs
  • Organizations that serve alcohol at fundraisers
  • Liquor stores
  • Grocery/Convenience stores
  • Catering companies

The number of patrons that an establishment serves will greatly impact how much their liquor liability insurance will cost. For example, if a small, private club only serves alcohol to its members, a $1 million liquor liability policy would cost approximately $1,000 per year. For the same $1 million policy, a large bar or restaurant would be looking at an annual premium of $25,000 or more.

Liquor liability coverage is crucial for businesses that serve alcohol, because in incidents where someone who’s intoxicated injures or kills someone else, liability falls upon whomever served that person alcohol. If the bar, restaurant, or other establishment that served the person is found to have been irresponsible and over-served that patron, they’re responsible for the damage caused.

Check back with us to learn more about liquor liability coverage and how to protect your business from potential liabilities!

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