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.
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.
Most states have dram shop laws that hold your business accountable if you sell alcohol to a visibly intoxicated individual who goes on to injure another person. For example, you could be held responsible if an individual 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:
Even if your establishment is not at fault, your business could face a costly legal defense if someone decides to sue.
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:
An intoxicated patron falls and injures himself, stumbles into another patron, or gets into a car accident. A lawsuit could be filed against you, holding you liable for medical expenses.
An intoxicated customer backs his vehicle into another patron’s car in your parking lot. The patron sues, holding you responsible for the cost of repairing the car.
An intoxicated patron starts a fight and injures another patron, who sues your establishment. Or, your staff escorts an intoxicated patron off the premises, who claims assault and battery.
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.
Liquor liability insurance can be purchased as a standalone policy, or added to a business owner’s policy or general liability policy. The cost depends on the size of your establishment, the policy limits, and other factors.
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Most food and beverage businesses pay a median 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:
Liquor liability insurance provides essential protection for establishments that serve alcohol. 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 discounted rate.
Workers’ compensation: This policy is required in most states for businesses with employees. It can cover medical expenses if an employee is injured on the job.
Commercial auto insurance: This policy can cover expenses related to accidents or damages involving a business vehicle. Business-owned vehicles must have this coverage.
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.
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.