Why Your Establishment Needs Liquor Liability | World Insurance

Restaurants are no stranger to selling alcoholic beverages alongside their dishes. Even if a restaurant doesn’t sell alcohol, they may host periodic events where alcohol is permitted. On top of that, some stores, breweries, and bars make a living off of selling alcoholic beverages. Unfortunately, an increased risk of liability accompanies the serving of alcohol, as it’s famous for impairing motor skills and judgment if abused. Given the perils of excessive alcohol consumption – such as liability for assaults, property damage, and drunk driving – it’s important to know the necessity of liquor liability insurance. 

Who Needs Liquor Liability Insurance? 

Any establishment serving alcoholic beverages – including concert halls, casinos, and catering companies – is required to have a liquor liability policy. These establishments are at high risk for liability and ensuing lawsuits if one of their patrons is later involved in an alcohol-induced accident or assault.

Do Employees Require a Personal Policy? 

Waitstaff, bartenders, and tasting guides are not required to have a personal liquor liability policy if the restaurant’s liquor liability insurance covers all employees. This is why it’s important for employees to always ask the owners of the establishment if they are covered under insurance.  

What Incidents are covered by Liquor Liability Insurance? 

Liquor liability policies will cover an event venue, restaurant, brewery, or any other establishment from many different alcohol-related incidents, some of which include: 

• Automotive accidents resulting from an intoxicated patron 
• Fights or assaults committed by intoxicated patrons
• Slips or falls involving an inebriated guest
• Alcohol poisoning 

Though it’s not out of the ordinary for liquor liability policies to differ in terms of what they cover, it’s important to consult an independent insurance agent to determine precisely what is covered. 

Does Liquor Liability Insurance Cover Incidents Involving Underage Customers? 

Many policies exclude claims resulting from incidents involving inebriated underage patrons. To keep your patrons safe and avoid lawsuits, you should stress the importance of checking patrons’ IDs with your team, regardless of whether your policy covers any underage incidents. 

What Affects Liquor Liability Insurance Premiums? 

There are a few considerations that can impact a liquor liability policy’s premium. When underwriting these policies, insurers will analyze and factor in the following: 

• The type of business – such as restaurants, venues, or stores 
• The number of patrons the business serves 
• The type of alcohol served – such as beer, wine, or spirits
• The location of the business
• The number of claims the business has filed in the past 

These factors will influence the costs greatly. For instance, a private club that serves just a few members may have a premium of just $1,000. On the other hand, a large restaurant or bar may have to pay $25,000 or more a year. 

Liquor liability insurance offers peace of mind to establishments serving alcohol. Alcohol tends to make some people act unpredictably under certain circumstances, which is why it’s important you train employees to identify intoxicated patrons. If you can take care of the safety protocols, your insurer can take care of your establishment by outfitting you with a comprehensive liability insurance policy and business owner insurance.

This article is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.