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Liquor liability insurance for bars and other food service businesses

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Liquor liability insurance

Liquor liability insurance provides coverage for legal fees, settlements, and medical costs if alcohol is sold to an intoxicated person who then harms others or damages property.

Reduce the risk of serving alcohol with liquor liability insurance

Liquor liability insurance is more than a safety net for the risks that come with serving alcohol. In most states, it's required for businesses that sell or serve alcohol.

Depending on your location, you may need this policy to obtain a liquor license. It’s especially important in states with dram shop laws, which hold businesses accountable for the actions of intoxicated patrons.

Businesses can be liable for damages under state dram shop laws

Most states have dram shop laws that hold your business accountable if you sell alcohol to a visibly intoxicated person who goes on to injure someone or damage property. For example, you could be held responsible if someone who became intoxicated at your establishment gets into a car accident or assaults another patron.

These are the only states that do not have dram shop laws:

In a state with dram shop laws, you might have to pay:

  • Legal fees
  • Medical bills
  • Settlements

Even if your establishment is not at fault, your business could face a costly legal defense if someone decides to sue.

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Liquor liability insurance protects against lawsuits

Liquor liability insurance can provide protection in several scenarios, though not when underage drinking is involved. When a bar, restaurant, or other food service business is sued over an incident related to alcoholic beverage service, this policy can help cover your legal expenses, such as court costs or a settlement. It can help cover the following:

Accidental injuries

An intoxicated patron could fall and suffer an injury, stumble into another patron, or get into a car accident. A lawsuit could be filed against your business, holding you liable for medical expenses.

Property damage

An intoxicated customer could back their vehicle into another patron’s car in your parking lot. The patron might sue, holding you responsible for the cost of repairing the car.

Assault and battery

An intoxicated patron could start a fight and injure another patron, who sues your establishment. Or, your staff might escort an intoxicated patron off the premises, who claims assault and battery.

On-the-job drinking

Regardless of company policy, it’s always possible your bartender might drink on the job. Liquor liability can cover damages caused by your employees as well as your patrons.

Add liquor liability insurance to your BOP

Liquor liability insurance can be purchased as a standalone policy, or added to a business owner’s policy (BOP) or general liability policy. The cost depends on the size of your establishment, the policy limits, and other factors.

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How much does liquor liability insurance for food and beverage businesses cost?

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Food and beverage businesses pay an average premium of about $75 per month for liquor liability insurance, but you could pay more or less depending on your risks.

Insurance costs for food and beverage businesses are based on a few factors, including:

  • Type of food and beverage business
  • Business equipment and property
  • Revenue
  • Location
  • Number of employees

Other important policies to consider

Liquor liability insurance provides essential protection for establishments that serve alcohol, but that's only one type of risk. Food and beverage business owners should also consider:

Business owner’s policy: A BOP defends against basic risks and protects your property. It bundles general liability insurance with commercial property insurance at a discount.

Workers’ compensation: Workers' comp is required in most states for businesses with employees. It can cover medical expenses if an employee is injured on the job.

General liability insurance: This policy protects against common risks, such as customer injury or damage to customer property. It’s often a requirement for a commercial lease.

Commercial auto insurance: This policy can cover expenses related to accidents involving your work vehicle. Most states require this coverage for vehicles owned by a business.

Cyber liability insurance: Cyber insurance helps food and beverage businesses recover financially from cyberattacks and data breaches.

Get free quotes and buy online with Insureon

Are you ready to safeguard your food service business with liquor liability or another type of insurance? Complete Insureon’s easy online application today. Once you find the right policy, you can begin coverage in less than 24 hours.

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Updated: April 5, 2023
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