Determining the need for liquor liability can be complicated, even among insurance professionals. Serving alcohol at a special event or owning a business that serves alcohol always involves a degree of risk. Liquor liability laws vary greatly by state, and insurance policy coverage options are often confusing.
Liquor liability insurance protects your company against loss or damages claimed as the result of a patron of your business becoming intoxicated and injuring themselves or others. If your business manufactures, sells, serves, or facilitates the use or purchase of alcohol, then you need liquor liability insurance coverage. Alcohol sales are excluded from the standard General Liability policy.
There are numerous scenarios in which Liquor Liability will cover. If an intoxicated person leaves a bar, restaurant, or any other location that sells alcohol and causes an accident, the person who caused the accident and the alcohol vendor can be sued. Another scenario is if an intoxicated person incites a fight and causes injuries, Liquor Liability will step in. Liquor liability could help pay out awarded damages and court costs in the event of a legal proceeding.
Here are some ways the law affects liability for companies that facilitate the use of alcohol:
“Dram Shop” Laws – These laws are established at state level and hold alcoholic beverage servers financially liable for harm that visibly intoxicated individuals cause to other people, themselves, or property. They can apply not only to bars, liquor stores and restaurants, but also to social clubs and private events where liquor is served. Dram shop laws also serve to curtail selling liquor without a license, selling liquor after hours, and selling liquor to minors.
Liquor Legal Liability – This is a type of insurance that provides coverage for bodily injury or property damage for which you may become legally liable as the result of contributing to a person’s intoxication. This coverage is provided by a separate policy and will only cover establishments that are in the business of manufacturing, selling, distributing, or serving alcoholic beverages for a charge. This exposure is not covered under a general liability policy.
Host Liquor Liability Insurance – These policies cover special events for businesses that elect to serve alcohol to their employees, prospects, and customers. This type of liability insurance covers people and businesses serving or providing alcoholic beverages to customers, guests, or employees.
Court decisions coupled with new state statutes are holding vendors of alcoholic beverages increasingly responsible for damages under liquor liability laws. Call or complete the Protection Savings Form for a free, no-obligation liquor liability insurance quote.
TIPS TO LIMIT THE POSSIBILITY OF A CLAIM:
- Train employees to be able to acknowledge and handle inebriated consumers
- Limit the size of drinks sold