What is Liquor Liability Insurance?

Liquor liability coverage is specifically designed to insure businesses that sell alcohol from liability suits arising from intoxicated patrons’ actions. Lawsuits may allege that a business enabled a customer to become too drunk and, therefore, ought to be responsible for any harm the drunk customer’s actions caused. A liquor liability policy may help pay for both legal expenses and settlements associated with such suits.

What Businesses in New York Should Have Liquor Liability Coverage?

Any business in New York that sells alcohol to customers may need liquor liability insurance. This includes both businesses that sell beverages for on-site consumption and those that sell alcoholic products for off-site enjoyment. Some examples of businesses that may need a policy include:

  • Bars and pubs
  • Nightclubs
  • Beer, wine, and liquor stores
  • Restaurants that serve alcohol
  • Venues that offer alcoholic drinks

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Why Should Businesses Get a Liquor Liability Policy?

Businesses in New York don’t necessarily need a liquor liability policy in order to obtain a liquor license, but most businesses should still have coverage for alcohol-related incidents involving patrons. Without liquor liability coverage, a single incident could bankrupt a business. Even if a business is found to be free of responsibility for an incident, simply defending a business in court could be an expensive proposition.

Although businesses may not need insurance to get a license, some businesses may find that they need liquor liability coverage for other reasons. Lenders, for instance, sometimes require businesses that they fund to have a policy so their investment will still be protected if there’s a lawsuit. 

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What Types of Incidents Does a Liquor Liability Policy Cover?

The exact types of incidents that a particular liquor liability policy covers depends on its specific terms and conditions. Some common kinds of incidents that are often covered by liquor liability policies include the following:

  • Drunk driving
  • Fighting
  • Sexual harassment and sexual assault
  • Falls, slips, and other personal injuries

Do Businesses with Liquor Liability Policies Still Need to ID Patrons?

Every business that sells alcohol should require official identification to ensure they don’t sell alcohol to minors. Not only is selling alcohol to underage individuals illegal, but it can also void a liquor liability policy's coverages. Many policies contain language that excludes instances of underage drinking from their coverage terms.

How Can Businesses Get Liquor Liability Policies?

Liquor liability insurance is often available both as a stand-alone policy and as part of a general liability policy. When purchased as a stand-alone policy, a general liability policy is usually still purchased (although separately). Which option is better depends on a particular business’ circumstances and needs.

Businesses that want to look at both stand-alone liquor liability policies and general liability policies that have liquor liability coverage should contact an independent commercial insurance agent that has experience insuring this field. An independent agent who serves New York will be able to compare all of the coverage options available to a business and help them select the liquor liability insurance that makes the most sense for them.

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Make Sure Your Business is Protected

Establishments that serve liquor can sometimes be held responsible for the actions of their patrons. If a customer becomes too intoxicated and is involved in an incident of some sort, both they and the establishment may be held liable for any damage or injuries sustained in the event. Liquor liability insurance helps protect New York businesses that serve alcohol from this potential risk.


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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