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 selling 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 customers.
Most states have dram shop laws that hold your business accountable if you sell alcohol to a visibly intoxicated individual or a minor. For example, you could be held legally responsible if an intoxicated individual buys alcohol at your shop, then gets into a car accident or assaults another customer.
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 liquor store, convenience store, or other retail business is sued over an incident related to the sale of alcohol, this policy can help cover your legal expenses, such as court costs or a settlement. It can help cover:
An intoxicated customer falls and breaks a wrist, stumbles into another customer, or gets into a car accident. A lawsuit could be filed against you, holding you liable for medical expenses.
An intoxicated customer backs their car into a truck in your parking lot. The owner of the truck sues, holding you responsible for the cost of repairs.
An intoxicated customer starts a fight and injures another customer, who sues your store. Or, your cashier escorts an intoxicated customer off the premises, who claims assault and battery.
It’s possible your staff might drink on the job. Liquor liability can cover damages caused by your employees as well as your customers.
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 shop, the policy limits, and other factors.
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Liquor liability insurance provides crucial protection for shops that sell alcohol, but it doesn’t cover common risks such as fire and theft. Other recommended insurance policies for retailers include:
General liability insurance: This policy can pay legal expenses related to third-party property damage and injuries, copyright infringement, and more.
Business owner’s policy: This policy bundles general liability insurance with commercial property insurance to protect against third-party risks, property damage, and theft.
Workers' compensation insurance: Stores with employees are usually required by law to buy this coverage. It covers the cost of work-related injuries.
Cyber liability insurance: This policy is crucial for retailers who handle credit cards or conduct business online. It helps cover the cost of a data breach or cyberattack.
Commercial umbrella insurance: Similar to excess liability insurance, this policy boosts coverage on your general liability, commercial auto, or employer’s liability policy once the coverage limit is reached.
Commercial auto insurance: State laws usually require this coverage for business-owned vehicles. It helps cover costs if your retail shop's delivery truck or other vehicle gets into an accident.
Are you ready to safeguard your retail store 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.