You may be a little hesitant to buy liquor liability insurance if you own anything else but a bar. However, this type of insurance can make or break any business that serves alcohol. It’s no secret that people can get a little rowdy when they’re intoxicated, and when you’re the business that served them that alcohol, you can be found liable for your patrons’ behavior. So, how can liquor liability insurance help protect your business when someone lets a little too loose? What is liquor liability insurance anyway? And why do you need it? Let’s take a look.
What is liquor liability?
Liquor liability is a term that’s used to describe a business’s responsibility for their guests’ physical well-being and property while the guests are consuming alcohol. Basically, you’re responsible, as a business owner, for keeping everyone in your establishment safe, even if someone is intoxicated. However, it also means that if anyone gets drunk and causes harm or property damage to another person, you could be found responsible for their actions.
Alcohol isn’t contained in the vacuum of a bar or nightclub. Companies have parties, restaurants have bars or liquor menus, and some hotels allow outside alcohol. So, liquor liability isn’t something that is just limited to bars and clubs. Your business can have liquor liability if you:
- Sell or distribute alcohol
- Let guests bring their own alcohol and drink at your place of business
- Serve alcohol at an event that you’re hosting
- Allow others to serve alcohol at your event (i.e. caterers, sponsors, vendors, etc.)
When there’s smoke, there’s fire. And where there’s alcohol – any at all – there can be trouble. So, you may want to consider the amount of liquor liability you have as:
- The owner of restaurants, bars, and nightclubs
- The owner of a retail, grocery, or convenience store
- A business or nonprofit that hosts parties
- A homeowner who hosts parties regularly
- A college or university that serves alcohol on campus
A company’s liquor liability can even include extreme cases like serving and selling alcohol to minors, people who are visibly intoxicated, or people who are regularly drunk.
But how is liquor liability different from a business’s general liability?
The general liability policy that you have for your business can only help cover the injuries that happen to a person because of your business, not if they happen to be on your property when they’re injured by another party.
For example, your general liability insurance could help you cover the medical costs of a drunk person tripping on an uneven landing and breaking their wrist. This was a hazard that was present regardless of whether the person was intoxicated or not.
However, it would not help cover if a drunk person starts a fight and breaks someone else’s nose. This instance is directly related to someone being served alcohol. In the same vein, your general liability insurance could help you cover the legal costs if the person with the broken arm decided to sue, but not the legal costs if the person with the broken nose decided to sue.
Honestly, navigating the differences of what general liability insurance and liquor liability insurance will cover can be a little tricky. That’s why our experts work to pinpoint your business’s specific risks to make sure you have only the coverage you need. Call 877.341.5728 or fill out our quote form to talk to an expert about how you can get affordable insurance to protect your business from liquor liability.
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What does liquor liability insurance cover?
So, the question stands as to what liquor liability actually protects you from. Liquor liability insurance can help you cover the medical bills and/or legal fees if your establishment has contributed to someone’s intoxication and that person causes physical, mental, or emotional harm to a guest or their property.
The most common cases in which business owners use liquor liability insurance are where damages to people or property come about due to:
- Drunk drivers
- Sexual assault & harassment
- Trips, falls, slips, and other accidents
- Alcohol poisoning
There are tons of stories of bars and restaurants who are held liable for a drunk driver’s car accident or hospital visits due to someone’s alcohol poisoning or severe injuries sustained while a person is drunk. So, even if you have systems in place for your staff to recognize and cut off someone who is intoxicated, it’s best to have additional protection in a worst-case scenario.
How much does liquor liability insurance cost?
Determining a business’s liquor liability can be a risky business. Since there are so many types of places and people that can have liquor liability insurance, the cost of your policy will depend on a few main factors:
What You’re Using the Space For
Since you can get liquor liability insurance for virtually anywhere that serves alcohol (including your home), the pricing for insurance is going to be different depending on how you primarily use the space you’re insuring. For example, carriers may see bars and nightclubs as riskier to insure than a restaurant or a company function that just happens to serve alcohol.
Where Your Space is Located
Different states and sometimes even different counties within the same state can have very different liquor laws. These laws will determine local dram shop laws, which are the regulations that assign liability standards for shops in a certain area. So, your insurance will also depend heavily on how strict your local dram laws are.
How Much Liquor You Sell
Of course, if you sell more liquor, you’re more likely to have liquor liability incidents. This can be good and bad for restaurants in particular. If a restaurant has a high volume of liquor sales, they pay the same rates for liquor liability insurance as a bar or a nightclub because they all pose a similar amount of risk.
Other Miscellaneous Traits of Your Business
Other than the previous three, determining the risk of liquor liability for your business will depend on certain aspects that vary from venue to venue. These aspects include:
- The type of entertainment offered
- The experience level of your management team
- The safety measures implemented at your business or location
- The procedures you have in place for identifying and dealing with intoxicated guests
Depending on your carrier, there may be a few other traits that they’ll look for when determining your risks and rates, but these are the most common things that insurance carriers will review.
Since finding a liquor liability plan can be so specific, it’s important to address every detail of the risks you face when providing your patrons with a great time. That’s why our experts know liquor liability insurance inside and out – so that they can ask the right questions to get the exact type of coverage you need. We know that not every place that serves or allows alcohol is the same, and we want to make sure that you don’t have to pay more for insurance that you don’t need. Call us at 770.497.1200 or fill out our online form to find out how you can get affordable rates on the liquor liability insurance you need.