Liquor Liability Insurance: Coverage, Cost, & Providers

Liquor liability insurance covers those who are legally liable for liquor-related damages. Who is covered? What does this cost to the consumer? And what companies offer coverage, and what’s their cost structure? These are just some of the questions that we’ll cover in this article.

Liquor liability insurance is a type of insurance that protects the legal liability associated with selling alcohol. There are two types of liquor liability insurance: general and specific. General liability covers any activity related to the sale or distribution of alcoholic beverages, whereas specific liability covers activities associated with an individual establishment.

Liquor liability insurance is required for businesses that make, sell, or serve alcoholic drinks. Liquor liability insurance covers the expense of claims resulting from drunken customers’ damages or injuries. Alcohol liability insurance for small businesses typically ranges from $250 to $2,500 a year, depending on the proportion of liquor sales and the kind of venue.

General liability plans do not cover alcohol-related occurrences, necessitating the purchase of liquor liability insurance. Contact Commercialinsurance.net for a quick liquor liability quotation for your small company. Its specialists will match you with a provider that can supply you with enough coverage.

Liquor Liability Providers

A combination of carriers and brokerages makes up our list of top suppliers. Independent brokers may quote various carriers, while carriers construct and underwrite the products they offer. If a company wants to collaborate with someone who understands everything about the product, it should hire a carrier. Working with a broker, on the other hand, allows company owners to compare offers.

Here are five of the most reputable alcohol liability insurance companies:

Commercialinsurance.net

Commercialinsurance.net is a website that links company owners with a variety of insurance providers. Business owners enter their information, which is then matched to all available providers using the company’s technology. After that, a representative assists the company owner in selecting a policy and connects them with an agent to complete the transaction.

For restaurant owners searching for liquor liability insurance, making that link may be quite beneficial. Not only do most company owners receive their insurance in under 30 minutes, but they often get the best pricing.

CoverWallet

CoverWallet is a small company insurer that customizes insurance to your industry’s particular risks. Along with offering some of the most inexpensive rates, they also provide instant access to a certificate of insurance, making it perfect for small companies looking for affordable insurance.

Damages originating from injuries connected to selling, serving, or providing alcoholic drinks, as well as legal fees to fight against claims seeking such damages, are covered in bars and restaurants that offer alcohol. Plans start at only $16 per month and may quickly get you covered. Fill out a short online application to get a free quote in minutes.

Program for Food Liability Insurance

The Program for Food Liability Insurance (FLIP) specializes in liability products for Restaurants and other food service businesses. The organization, managed by Veracity Insurance Solutions, LLC, offers an easy application process and instant quotes for affordable food business liability products.

FLIP is the ideal option for caterers and bartenders who want their liquor liability and general liability coverage combined together. Caterers and bartenders who currently have general liability coverage may add solo liquor liability coverage to their policy. Annual premiums for combination coverage begin at $498.

R.V. Nuccio & Associates

R.V. Nuccio & Associates (RVNA) specializes in event-related insurance policies, covering both the vendors and the hosts. The site is 100% automated, and business owners can get quotes for customized coverage in 15 seconds.

R.V. Nuccio & Associates is the best choice for nonprofits that host fundraisers where alcohol is sold. Selling alcohol changes the risk, and RVNA sells a one-day event insurance policy that includes retail liquor liability coverage. Policies start at $50 for a single event.

What Is Liquor Liability Insurance and How Does It Work?

A coverage for firms that sell, distribute, produce, or serve alcohol is known as liquor liability insurance. It protects the company from being held liable for damages caused by an inebriated customer. Liquor responsibility covers the expenses if the owner or an employee overserves a client, who subsequently injures another person or destroys their property.

The following are some examples of probable losses covered by alcohol liability insurance:

• Expenses incurred by an injured party as a result of an altercation with an inebriated customer that results in a fight
• If an inebriated guest crashes their automobile into another party’s mailbox, they will be responsible for the repair costs.
• If an affected party sues for damages caused by an overserved customer, the policyholder’s legal fees are covered.

Liability insurance for alcohol does not cover all of the concerns that may arise in your company. It does not, for example, protect an inebriated customer from injuring an employee. This necessitates the purchase of workers’ compensation insurance. It also doesn’t cover server-related losses. This is usually covered by your general liability insurance.

Liquor Liability Insurance: Who Needs It?

Liquor liability insurance is advised for any small company that sells or serves alcoholic beverages on a regular basis. There are instances, though, when a policy is essential. Liquor liability is usually a condition for acquiring a liquor license in most states. Some commercial landlords and business partners may demand it in their leases and contracts.

As a result, the following firms are most likely to need liquor liability insurance:

• Bars
• Restaurants
• Caterers
• Wineries and breweries
• Stores that sell alcoholic beverages
• Beer, wine, and/or liquor shops
• Certain performance and event venues
• Landlords with tenants that participate in the aforementioned activities

States’ dram shop laws determine who is liable for alcohol-related accidents. In some states, those laws put at least some of the burden for safe alcohol consumption on the businesses serving or selling the booze. Others hold the patron responsible for their consumption. Either way, the trial lawyer and managing partner of Simeone & Miller LLP Thomas Simeone say business owners need to protect themselves.

“It is the responsibility of all pubs and restaurants to be fair” (i.e., not negligent). Even if they aren’t at fault for accidents caused by drunken patrons, they may be held liable for supplying too much alcohol to someone who injures himself or provokes a brawl in the bar. For example, if a pub has a poorly lighted stairwell, the more people it serves, the more likely they are to fall and file a claim. If that’s the case, the pub will have to acknowledge that it was aware that the stairs were being used by inebriated individuals, making them potentially unsafe.”

Liquor liability insurance is required if your company manufactures, sells, or serves alcoholic drinks. This is because practically all business general liability insurance excludes responsibility stemming from the sale or service of alcoholic beverages.

What Doesn’t Liquor Liability Insurance Cover?

Businesses whose principal activities involve selling or producing alcohol benefit from alcohol liability insurance. Because their general liability insurance covers limited host liquor liability insurance, a business owner who conducts corporate events on a regular basis, such as a Christmas party, is unlikely to require liquor liability insurance.

Finally, liquor liability only covers claims brought by third parties. Damage to your property caused by a customer who has been overserved is not covered. It also excludes alcohol-related commercial damage, such as defamation, and claims involving underage drinking.

Costs of Liquor Liability Insurance

Throughout the U.S., Costs of Liquor Liability Insurance can range from $250 to $2,500 per year. The cost depends on several factors, including your business size, the amount of protection you need, and the legal requirements in your state. Alcohol liability insurance costs are much higher in states with stricter liquor laws, like Texas.

Costs of Liquor Liability Insurance & Deductible by Business Type

While the price of liquor liability insurance varies, there are a few key factors that a company may use to evaluate its expenditures. Some elements, like state legislation, are beyond your control, but the majority of expenditures are determined by circumstances unique to your company.

“In my experience dealing with restaurants, sales, packaging, and loss control are three of the most significant cost drivers for liquor liability insurance.” Greater sales, for example, usually imply higher premiums. Furthermore, companies seldom purchase a single liquor liability policy; instead, they bundle coverage into a single package, lowering the entire cost of insurance. Loss management may be as simple as teaching personnel using a program like TIPS to limit the risk of claims.” The Robert P. Brady Agency, Inc.’s Gregg Petry

The following are five elements that influence the cost of liquor liability insurance:

1. The total amount of alcohol sold

Liquor liability expenses are often calculated as a proportion of total sales by insurance firms. This gives you an idea of how many consumers you service, which helps to determine risk variables.

This is especially important for bar and restaurant operators that offer high-end wine, top-shelf spirits, or artisan breweries. Their customers may not be consuming as much alcohol as their receipts indicate. They may be able to persuade their insurer by calculating the average cost of the alcohol they sell.

2. Policies that are bundled

Liquor liability insurance is often more costly when purchased alone than when combined with other coverage. A company owner’s insurance, for example, might save money by bundling coverage for all significant property and liability risks into one package.

3. Your Insurance Claim History

Higher premiums are frequently associated with more claims on your liquor liability insurance. Because insurance firms examine your claims history and compare it to those of comparable businesses, this is the case. Your insurance will charge you more if you have more claims than these other firms because they anticipate you will cost them more.

Smart, proactive loss control techniques, such as staff training via a curriculum like Training for Intervention Procedures, may help you keep expenses low (TIPS). Many insurance companies provide discounts to company owners who employ only waitstaff who have TIPS or ServSafe credentials.

4. State Legislation

Most states have a dram shop legislation that holds companies accountable for injuries, damages, or death caused by the company owner or their employees supplying a clearly drunk person. Dram shop regulations, for example, allow victims of intoxicated drivers to sue the institution that gave the driver the alcohol.

Because of dram shop rules, which have been approved in most states but aren’t consistent, the cost of liquor liability insurance varies greatly by state. Because of this disparity, business owners should check their state’s dram shop statute and other associated regulations before determining how much liquor liability coverage they need. Below you’ll discover information about your state’s dram shop legislation.

5. Establishment Type

Coverage and costs will vary by business type. For example, the Costs of Liquor Liability Insurance for a typical restaurant can be lower than a bar because alcohol is only an incidental consumption item. But at a bar, alcohol consumption is the primary purpose.

How to Reduce Your Costs of Liquor Liability Insurance

A big part of keeping Costs of Liquor Liability Insurance down is by not having any claims. Buying a liquor liability insurance policy doesn’t mean that responsible, cautious behavior is less necessary. In fact, you may see a reduction in premium in exchange for good risk management and loss history.

Training your staff is one of the most effective strategies to lower your chances of submitting a claim. Professor of Hospitality Management at NYIT School of Management James Henry Dunne, J.D. says:

“Having your service employees educated and certified in responsible alcohol service (TIPS, ServSafe, etc.) not only helps to promote professionalism amongst your team, but it also helps to lower your liability rates” (varies depending on your insurance provider and state where you operate). Many insurance companies demand employees to take a responsible service certification course on a regular basis merely to keep their coverage.”

With these proactive actions, you can safeguard your employees and your business:

• Employees should be trained – Liquor liability policyholders may get free training from reputable insurers in the bar and restaurant insurance market. This course may qualify you for a premium discount.
• Engage the services of skilled bartenders – Most bartenders have received training in detecting indications of drunkenness and preventing excessive alcohol use. They may be able to avert disaster before it occurs.
• You can never be too careful when it comes to serving minors. Any client who seems to be less than 30 years old should have his or her identity checked by the bartender. Minors should not be invited to social gatherings where alcoholic drinks are provided.
• If your company is planning an event that will include the consumption of alcoholic beverages, hold it at an offsite venue. If a liquor-related event occurs, it’s ideal if it happens away from the company.
• Pay for alcoholic beverages yourself – Purchasing drinks for your visitors might raise the danger of accidents and may affect your liabilities. Guests might be asked to bring their own drinks to social gatherings.
• Use a voucher system – Drink coupons might help you cut down on your alcohol intake.
• Serve food and non-alcoholic drinks — Providing food and non-alcoholic beverages may assist your consumers and visitors keep track of their alcohol usage.

Liquor Liability Insurance Supplementary Policies

Liquor liability insurance is required for businesses that make, sell, or serve alcoholic drinks. However, the coverage is restricted to occurrences involving alcohol. There are various insurance products that might safeguard your company against the additional hazards it confronts.

Here are some supplementary insurance coverage that many companies require:

• Umbrella Insurance – Umbrella insurance extends your liability coverage beyond the limitations of your existing insurance plans. Legal expenses, for example, may surpass your liquor liability limitations, and an umbrella coverage may help pay the difference.
• Workers’ compensation — Restaurant and bar personnel are exposed to a variety of risks on the job, including damp flooring, shattered glass, inebriated patrons, and a fast-paced workplace. Workers’ compensation insurance is required for certain firms since liquor liability insurance seldom covers employee accidents.
• Business Owner’s Policy – Some businesses choose to bundle general liability and property insurance into a business owner’s policy. Combining coverages usually reduce your rates, so getting a business owner’s policy can help balance out the extra Costs of Liquor Liability Insurance.

Liquor Liability versus. Liquor Liability of the Host

If your business does not manufacture, sell, or serve alcoholic beverages, you may not need liquor liability insurance. Standard general liability policies include host liquor liability coverage. Since it’s included in the policy, it’s hard to say what host Costs of Liquor Liability Insurance, but general liability tends to be less expensive than alcohol liability insurance.

Let’s imagine your firm holds an event at which alcohol is given, and someone gets injured as a result of one of your inebriated visitors’ activities. That person may sue you for damages, but your general liability most likely covers it because you’re not in the business of making, selling, or serving alcohol.

Host liquor liability, on the other hand, does not cover all claims. If an alcohol-related injury or damage is caused by your carelessness, you may still be sued under tort law by a third party. As a result, social hosts may want to consider purchasing event insurance.

Most Commonly Asked Questions (FAQs)

Liquor liability insurance is required for any firm that sells or manufactures alcoholic beverages. Apart from bars and restaurants, this applies to a wide range of enterprises, so you may still have insurance-related issues. We’ve compiled a list of frequently asked questions and provided answers below.

Is Liquor Liability Insurance Required for a One-Time Event?

Many companies and NGOs conduct alcohol-related events. The host liquor liability in their general liability coverage normally covers the risk for firms that don’t sell alcohol on a regular basis. You should, however, be aware of your limitations. Liquor liability claims are inconvenient and costly, so you may want to boost your coverage for a big event.

Is my liquor liability insurance going to cover the alcohol I’m making?

Liquor liability protects you from legal culpability if you make alcohol and offer it to someone who subsequently causes property harm. If you create tainted booze that makes customers sick, your general liability policy’s products-completed operations coverage will most certainly kick in.

Is Damage to My Property Covered by Alcohol Liability Insurance?

Third-party injuries and losses are covered by alcohol liability insurance. People who are not directly engaged in a situation are referred to as third parties. For company owners, this simply implies anybody who isn’t an employee, thus liquor liability doesn’t cover your or your workers’ losses or injuries.

Conclusion

Getting the correct liquor liability insurance coverage, like any small business insurance, is critical to your company’s beginning, development, and long-term success. Whether you’re serving booze at a one-time event at an offsite location or selling and serving alcohol on a regular basis, you’ll need a liquor license and, as a result, alcohol liability insurance.

Commercialinsurance.net is a wonderful place to start if you need further help obtaining the correct liquor liability insurance for your company. Its professionals can assess your risk and the implications for the coverage you need. There’s no cost to get a quotation, and there’s no commitment.