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What Is Liquor Liability Coverage?
Liquor liability insurance helps protect businesses that sell, serve or distribute alcohol. This type of business insurance can help cover claims of bodily injury or property damage that an intoxicated customer causes after a company served them alcohol. You can get this as a standalone policy or add it as an endorsement to general liability insurance coverage.
If your business gets sued, liquor liability insurance helps protect your business by covering your:
- Legal costs
- Settlements or judgments
- Repairs costs to fix property damage
- Medical bills to treat an injury
What Does Liquor Liability Insurance Cover?
Liquor liability insurance can help cover claims of:
- Assault and battery, like if a customer you served alcohol to physically hurts another person.
- Drunk driving if an intoxicated person your business served or sold alcohol to damages property or causes an accident that leaves another driver with a bodily injury.
- Property damage that a customer under the influence of alcohol causes to another person’s belongings.
How Much Does Liquor Liability Insurance Cost?
Generally, liquor liability insurance cost is impacted by the percentage of your sales from selling alcohol. So, a bar will likely pay a higher cost for liquor liability coverage than a restaurant or grocery store.
The best way to find out what the liquor liability insurance cost for your business will be is to get a quote. That’s because an insurance company uses different factors to determine the cost of liquor liability insurance. This can include your business’:
- Industry: Certain industries face more risk, which can increase insurance rates.
- Location: The state your business is in can have an impact on insurance costs.
- Coverage limits: The higher your policy’s limit, the more you’ll pay for your insurance premium. Be aware that some states may require businesses to have a minimum amount of liquor liability coverage.
- Liquor sales: The number of sales your business makes annually can impact your rate.
Ways To Save Money on Liquor Liability Insurance
Small business owners can save money on liquor liability insurance through:
-
Bundling and getting another type of insurance with your liquor liability insurance, such as special event insurance
- Paying premiums upfront instead of monthly
- Managing risks with employee alcohol training and serving water with alcoholic beverages
Do I Need Liquor Liability Insurance?
If your business makes, sells, distributes or serves alcohol to customers, you’ll want to get liquor liability insurance. Some types of businesses that may need liquor liability coverage include:
- Restaurants
- Caterers
- Liquor stores
- Grocery stores
Liquor liability insurance is also important if your business is in a state with dram shop laws. These laws allow businesses to be held liable if they sell or serve alcohol to intoxicated individuals who cause an injury or damage property.1 Forty-three states have dram laws in place.
Common Questions About Liquor Liability Coverage
What Is the Difference Between Host Liquor Liability Coverage and Liquor Liability Coverage?
Liquor liability coverage helps protect businesses from claims of bodily injury or property damage if they sell, make or serve alcohol. You can add this coverage as an endorsement on your general liability insurance policy. Host liquor liability coverage helps protect companies that don’t sell alcohol but allow people to drink it on their business property. Host liquor liability coverage is included in a general liability policy.
It's a good idea to get liquor liability insurance if your business holds special events where liquor is served or consumed. This can include an accounting firm holding an annual holiday party where alcohol is served.
Does My General Liability Insurance Cover Liquor Liability?
You’ll likely find host liquor liability insurance in a general liability insurance policy, also known as commercial general liability insurance. If your business doesn’t sell or serve alcohol but allows people to drink it on your premises, like at special events, general liability insurance can help cover claims that your business caused bodily injury or property damage.
Liquor liability insurance, however, isn’t included in this policy and is a different coverage. You’ll need to get this coverage if your business sells, serves or distributes alcohol.
What Is Liquor Liability Insurance Called?
Another name for liquor liability insurance is dram shop insurance. A dram shop is a bar or business that focuses on selling, serving or making alcohol. It also refers to the dram shop laws that a majority of states have.
Get a Liquor Liability Insurance Quote
We’re an insurance company with more than 200 years of experience. Our specialists can help you get a liquor liability insurance policy and any other coverage options you may need. And if you need help with a claim, we’ve got your back. Get a free business insurance quote today.
Last Updated: June 14, 2022
1 National Conference of State Legislatures, “Dram Shop Liability State Statutes”