What is Liquor Liability Insurance?

Businesses that sell alcohol to customers are sometimes held responsible for any damage or injuries their intoxicated customers cause. Liquor liability insurance policies help protect businesses from potential liability claims and lawsuits that arise from alcohol-related incidents.

Liquor liability insurance policies offer a specialized type of liability protection, for their coverages are usually limited to certain alcohol-related incidents. For covered incidents, though, these policies usually offer robust protection. They’ll typically help pay both legal fees and settlements associated with covered claims, and their limits are often set quite high.

What Businesses is Liquor Liability Coverage Right For?

Most businesses that sell alcohol to consumers should have liquor liability coverage. In some cases, coverage is required by state law, a contract agreement, or the terms of a business’ lease or mortgage. In other cases, it’s simply a good idea to protect a business from potentially expensive liability suits.

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Some particular businesses that may want liquor liability coverage include:

  • Bars, taverns, and pubs
  • Wineries, breweries, and distilleries
  • Restaurants that offer adult beverages
  • Grocery stores, convenience stores, and gas stations that sell alcoholic beverages
  • Wine, beer, and liquor stores
  • Distributors that carry alcoholic beverages

Protect Your Business

Do Businesses and Individuals Hosting Events Need Liquor Liability Coverage?

It’s frequently a good idea for hosts of events where alcohol will be served to carry liquor liability coverage. Some hosts that might benefit from the protections offered by liquor liability policies include:

  • Businesses that are putting on company-wide events where alcohol is served
  • Nonprofit organizations that host fundraisers where alcohol is offered
  • Individuals who host weddings, holiday parties, or other big gatherings that include alcoholic drinks 

When a liquor liability policy is needed for a single event, a policy that lasts just a few days is often purchased. Some policies will even provide coverage for just one day. Limiting coverage to only the days when an event is taking place can help businesses, nonprofits, and individuals that put events on keep premiums low while still getting all the coverage they need.

What Kinds of Incidents Are Covered by Liquor Liability Policies?

Precisely what incidents a liquor liability policy covers depend on the policy’s terms, conditions, and exclusions (which is why it’s important to review these carefully when purchasing a policy.) With the right coverages in place, a policy might cover incidents like the following:

  • A tipsy customer trips and is injured
  • Two drunk customers get into a physical confrontation
  • An intoxicated customer sexually assaults another person
  • A customer fails to sober up before going home and causes a car accident

Is It Necessary to Check IDs If a Business Has a Liquor Liability Policy?

Purchasing a liquor liability policy doesn’t give a business license to stop checking customers’ identifications. Regardless of how well a business is insured, selling alcohol to underage individuals remains illegal -- and businesses that are caught doing so may face serious consequences.

Additionally, many liquor liability policies have language that excludes any instances of underage drinking from their coverages. Thus, serving alcohol to underage customers can jeopardize a business’ coverage and leave the business dangerously exposed to the risks it’s trying to insure against.

Make Sure You Have the Right Coverage

How Can Businesses Get Quotes for Liquor Liability Insurance?

For help finding liquor liability insurance, businesses, nonprofits, and individuals can contact an independent insurance agent who’s licensed in their state. An independent agent can help determine what coverages are appropriate to get, and they can request quotes for policies that have those coverages. Since independent agents aren’t obligated to work with a single insurance company, they can get quotes from multiple insurers and help clients choose the policy that best meets their needs.

Meet Your Industry Specialist

Jeff Kroeger

Principal, Senior Vice President, and Head of Commercial Lines, Mr. Kroeger also manages the company's hospitality book of business and is that unit's primary producer. He is a graduate of Montclair State University and was named a 2015 Young Gun Insurance Business America.

Jeff has been providing exceptional insurance for restaurants, bars, nightclubs, and more for many years. He understands the unique challenges this industry faces and delivers the right coverage at an affordable price.

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