Liquor Liability Insurance for Your Business

Essential insurance protection for bars, restaurants, and more.
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Protect Your Business From Liability Lawsuits

If your business profits from the sale of alcohol, you'll need liquor liability insurance to operate with peace of mind. These policies protect you from paying legal fees, settlements, and medical bills associated with bodily injury or property damage caused by an intoxicated person who was served alcohol by your business.
  • Intoxicated customers are a liability for personal injuries or property damage
  • Protect your business from legal fees, settlements, medical bills
  • Get coverage for bar fights, property damage, injuries, and driving under the influence

If you are selling or serving alcohol, your commercial general liability insurance will exclude injury and property damage caused by an intoxicated person. Businesses that will need liquor liability coverage include:
Restaurants original

RESTAURANTS

Wineries and breweries original

WINERIES AND BREWERIES

Bars and taverns original

BARS AND TAVERNS

Caterers original

CATERERS

Grocery stores original

GROCERY STORES

Liquor stores original

LIQUOR STORES

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Alcohol Consumption Means Liability Risk

Liquor liability insurance is also known as “dram shop” insurance because it was developed to counter dram shop laws. These laws are named after establishments in 18th century England that served gin by the spoonful or "dram."

Dram shop laws in more than 40 states hold businesses liable for the actions of intoxicated customers who were served or sold alcohol at their establishment. This means a third-party victim can sue the intoxicated person and the business that served them.

Consider if you were a bar owner and several drunk patrons broke into a fight following a particularly tense sporting event. One man suffers a broken nose and fractured collarbone from the incident and sues the perpetrator and your business for damages. Regardless of whether the court determines you overserved a clearly intoxicated person, expensive legal fees could harm your business.

Liquor liability insurance covers any legal costs, settlements, and medical fees you may be liable to pay.

How much does liquor liability insurance cost?

The cost of your insurance coverage will depend on several factors like:
  • Exposure to intoxicated customers
  • The industry of your business
  • Location
  • Your claims history

Most of these factors are out of your control. However, many insurances offer discounts if you offer education and training for your staff. You can also adjust your coverage amounts and deductibles to save. The best way to save money is to contact your agent about lowering your insurance bill.
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What does liquor liability insurance cover?

Liquor liability insurance protects your business from paying for legal costs, settlement fees, and medical bills when a third-party suit is brought against you.

For example, a drunk driver causes a car accident several hours after leaving your establishment. The victim of the accident sues the driver, as well as your restaurant and the bar the driver visited later in the night. Having the right insurance means you can weather these claims financially no matter the outcome.

Your liquor liability insurance coverage includes:
  • Defense fees against third-party legal action
  • Payment of legal settlements
  • Medical expenses

Do I need liquor liability insurance for a wedding?

If you are the host of a wedding, no, you will not need a liquor liability policy. This coverage is a type of business insurance not required for individuals. If your business does not commercially benefit from the sale of alcohol, but you host a wedding where alcohol is served, your general liability policy will generally include host liquor liability insurance.

If you are a caterer or bartender, you will need liquor liability for a wedding – and all the other events where you are doing business.
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Do I need liquor liability insurance as a bartender?

Yes, bartenders need the appropriate liability insurance. If you are for hire as a bartender, you need to have the right insurance to protect your assets in the event of a lawsuit.

Let's say an accounting firm hires you to bartend for their annual holiday party. A junior accountant drunkenly falls out a second-story window and breaks his leg. He may claim you are liable because you overserved him at the party.

The right insurance will protect your finances from the fallout of your drunken customers’ actions.
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Are there liquor liability exclusions for businesses that allow BYOB?

Certain businesses may not be considered liable for injuries or damages caused by an intoxicated person they served. If you do not profit from alcohol sales in your business, you won't need liquor liability insurance.

Additionally, if you allow alcohol on a "bring your own beverage" policy, you may be exempt from liability. A few examples of businesses that may not face liability:
  • A nail salon or spa offering complimentary wine or cocktails
  • A "paint and sip" art studio allowing customers to BYOB
  • An event venue allowing clients to provide food or drink

If there is alcohol involved in any capacity with your business, it is in your best interest to consult an expert for your liability coverage. Our professional insurance agents are able to learn your business and industry and provide you with customized insurance coverage.

Do you have a question about liquor liability insurance?

Our agents are ready to answer any of your questions.
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