Most leaders of nonprofits know that their organizations may need general liability, commercial property, commercial auto or similar insurance policies. Directors and board members don’t always realize that their organizations also might need liquor liability insurance. If you lead a nonprofit organization, here’s why you should talk with a knowledgeable insurance agent about liquor liability coverage.
Should Your Nonprofit Organization Have Liquor Liability Insurance?
Many Nonprofit Organizations Serve Alcohol
A surprising number of nonprofits serve alcohol, at least occasionally. Some routinely offer it at regular events, and others offer it only occasionally at special events. Even providing alcohol just once a year at an annual fundraiser qualifies as serving alcohol, however, qualifies as serving alcohol.
Moreover, organizations don’t need to necessarily provide alcohol themselves to be considered serving it. Letting people bring their own drinks to a small weekly gathering, monthly potluck or annual picnic might subject a nonprofit to the risks that come with serving alcohol.
Organizations May Be Held Liable for Alcohol-Related Incidents
Nonprofits that offer alcohol may be held responsible for any alcohol-related incidents that occur at their events. Fights between intoxicated attendees, damage caused by intoxicated attendees, injuries sustained by intoxicated attendees and car accidents caused by intoxicated attendees might all come back on the nonprofit that hosted the event where alcohol was served.
This is true even if the organization itself isn’t the one actually serving drinks. Whether beverages are offered by employees, volunteers, a hired caterer or bartender, or attendees, anyone involved with the offering of alcohol may be held liable. This can often include:
The person who became too intoxicated
The person who physically served the beverages
The company that offered the beverages
The company that owned the property where the event was held
The organization that sponsored the event
Even if your nonprofit doesn’t fall into any of the first four categories, it will fall into the last one for any events held by the organization.
Lawsuits Can Be Expensive to Defend and Settle
Should your nonprofit ever be found liable in a lawsuit related to an alcohol-induced incident, the organization could face an enormous settlement or judgement depending on what the exactly transpired. Your organization doesn’t need to ultimately be found guilty to be financially devastated by this type of lawsuit, though.
Simply being named in a liability lawsuit can lead to expensive legal fees. Most nonprofits don’t have the financial resources to withstand even a minor liability suit without seeing detrimental effects, and a major one would completely cripple or destroy many organizations.
Liquor Liability Insurance Offers Affordable Protection
Liquor liability insurance provides protection against many of the costs that covered lawsuits create, offering help with covered legal fees, settlements and judgements. Exact protections vary, but many policies offer coverage for incidents like those mentioned above.
Additionally, coverage is often available at affordable rates because the effective dates of policies are usually flexible. Nonprofits can usually limit the coverage dates to only when they’re hosting events where alcohol is offered, even getting just a few days of coverage if protection is needed for just one event. This keeps premiums low by greatly reducing the insurance company’s risk exposure.
Talk With a Knowledgeable Agent About Protecting Your Nonprofit
A liquor liability policy that offers robust protections will give your nonprofit the coverage it needs, but only when it needs those coverages. To find a policy like this, talk with an independent insurance agent who specializes in liquor liability insurance. An agent who’s familiar with this type of insurance will be able to recommend a policy that’s perfect for your organization’s coverage and budget needs.