Host liquor liability insurance helps cover alcohol-related incidents and liabilities for small businesses that serve alcohol.
What is host liquor liability insurance?
Host liquor liability insurance protects businesses that don't manufacture, serve, or sell alcohol from the cost of liquor-related lawsuits. It is designed to protect companies that are hosting a social event, such as a company party, where the company is furnishing alcohol to guests or allowing people to bring their own drinks.
Host liquor liability is often included in general liability
General liability insurance can pay for lawsuits related to third-party injuries or property damage. Host liquor liability insurance is often included in a general liability policy. It specifically covers claims related to a guest at a business’s social event who drinks too much alcohol, then causes property damage or bodily injury as a result of intoxication.
Example of host liquor liability in action
An advertising firm is hosting a holiday party in the office, and provides alcoholic punch and food for the staff. Jill, an account executive, has too much to drink at the party. She is starting to slur her words and have a hard time keeping her balance. She decides she's had enough and leaves the party to drive home. On the way, she runs a stop sign and broadsides another car, causing substantial damage to the other car and driver, who suffers a neck injury and broken arm.
The injured driver could sue the advertising firm for providing alcohol to Jill and allowing her to drive home. Since the advertising firm does not make or sell alcohol as part of its business operations, the host liquor liability insurance included in the firm's general liability policy should pay for the victim's medical bills and car repairs. It can also pay for a lawyer to represent the advertising agency in court if the victim sues, as well as any damages the court may order the company to pay to the victim.
Host liquor liability vs. liquor liability
Host liquor liability insurance does not cover companies that manufacture, sell, or serve alcohol as part of their business operations, such as bars, breweries, and restaurants. Instead, businesses that sell or serve alcohol for profit would need to purchase liquor liability insurance to gain protection from lawsuits related to inebriated patrons who cause bodily harm or damage to others.
What is social host liquor liability?
Social host liquor liability refers to the liability individuals assume as a host if they hold a social gathering where alcohol is provided, but guests aren't paying for it. It covers individuals, not businesses, and is typically included in homeowner's and renter's insurance policies. If someone throws a party and a guest causes property damage or injuries to a third party after becoming intoxicated, social host liquor liability can pay for the host's legal expenses if a lawsuit is filed.
Hosts can be liable for more than third-party liability claims
The coverage provided by host liquor liability insurance doesn't mean business owners are totally off the hook if a guest drinks too much and causes property damage or harm to another person. Business owners that act as a social host could face penalties, including fines and jail time, if they are found to have violated local or state liquor laws. That could include serving alcohol to minors, or to adults who are visibly drunk. Since the laws vary by region, business owners should check their local dram shop laws or talk to their insurance agent to ensure they are in compliance when hosting an event.
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Insureon’s commercial insurance agents are knowledgeable about host liquor liability insurance and can advise you of any liquor laws relevant to your area. Apply online for free business insurance quotes from Insureon’s network of top-rated U.S. carriers. Our insurance specialists are licensed in every state and can help you find affordable protection for your business.