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. They’ll typically help pay both legal fees and settlements associated with covered claims, and their limits are often set quite high.

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. 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, and distributors that carry alcoholic beverages.

It’s 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, or 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.

Precisely what incidents a liquor liability policy covers depend on the policy’s terms, conditions, and exclusions. With the right coverages in place, a policy might cover incidents like a tipsy customer trips and is injured, two drunk customers get into a physical confrontation, an intoxicated customer sexually assaults another person, or a customer fails to sober up before going home and causes a car accident.

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.