Liquor liability insurance cost

Small businesses pay an average premium of $41 per month for liquor liability insurance. Most businesses pay around $150 to over $4,000 per year, depending on their unique business risks.

Our figures are calculated using the median cost of policies sold by leading insurance companies to Insureon's small business customers. The median offers a better estimate of what your business is likely to pay because it excludes outlier high and low premiums.

While Insureon's small business customers pay an average of $41 monthly for liquor liability coverage, 56% pay less than $50 and 15% pay between $50-$100.

The cost varies for small businesses depending on their risks and the coverage they choose.

Liquor liability costs and insurance premiums are determined by a number of factors. These factors include:

• Coverage limits and deductible
• Liquor sales
• Industry risks
• Server training
• Location
• Claims history

Your coverage limits and deductible play an important role in determining the cost of liquor liability insurance.

Higher coverage limits typically result in higher premiums because the insurer may pay more for covered claims. Choosing a higher deductible can help lower your premium, though you'll pay more out of pocket if a claim occurs.

For Insureon customers, the average liquor liability policy includes a $1 million per-occurrence limit and a $2 million aggregate limit. These limits can help cover legal fees, settlements, judgments, medical expenses, and property damage resulting from alcohol-related incidents, up to the policy's coverage limits.

Liquor liability insurance, sometimes called dram shop liability insurance, is often required for businesses that sell or serve alcohol, and some states require proof of coverage before issuing a liquor license. Coverage requirements can also vary by business type.

Because liquor liability insurance only covers alcohol-related claims, many businesses also purchase general liability insurance to help protect against other third-party bodily injury and property damage claims.

The cost of liquor liability insurance is influenced by what percentage of your sales are made from alcohol. The cost goes up for businesses with a higher percentage of alcohol sales.

This often means bars and night clubs pay more for liquor liability insurance than convenience stores, grocery stores, pharmacies, and other businesses that sell food and other items as well.

For larger liquor sales events, such as fundraisers, weddings, or festivals, you may want to consider special event insurance. This policy is great for vendors who don't need to carry insurance all the time and want to save money on an annual policy, but still need short-duration coverage in the event of an incident.

Your industry and the type of business you run can impact your insurance premiums. For example, banquet halls, food trucks, and mobile bartending businesses will likely pay more than restaurants and pizzerias for liquor liability coverage, due to their increased alcohol-related exposures.

Certain businesses face a greater risk of claims involving intoxicated patrons, resulting in bodily injuries, property damage, or lawsuits with high legal defense costs.

Mobile bartenders, in particular, may work at weddings, private parties, festivals, and other off-site events where they have less control over the environment and rely on venue staff or hosts for security and crowd management. These factors can increase the likelihood of liquor liability claims.

Other factors, such as longer operating hours, security presence, and the frequency of alcohol consumption, can also impact costs.

Many insurers offer lower-cost insurance for establishments that provide training for their staff.

The type of training required may vary, but could include topics such as navigating alcohol sales, avoiding over-serving and preventing intoxicated patrons, first aid, and more.

Speak with a licensed insurance agent to discuss how employee training could impact your insurance rates.

Some state laws specify how much liquor liability coverage a business must have if it allows alcohol consumption on its premises, as well as during hours of operation.

Liquor liability insurance requirements vary by state and can change over time. For example, many South Carolina businesses that sell alcohol for on-premises consumption after 5 p.m. must maintain at least $1 million in liquor liability coverage. However, some may qualify for lower limits under state-approved risk mitigation programs.

Additionally, Minnesota requires alcohol-serving businesses to carry liquor liability coverage that includes at least $50,000 for bodily injury to one person, $100,000 for bodily injury to two or more people, and $10,000 for property damage. Business owners should check their state's current requirements, as minimum coverage limits and licensing rules may be updated periodically.

Other states, like Nevada, don't have any liquor liability requirements, but small businesses should still consider the policy to navigate the risks associated with selling alcohol.

Below are average liquor liability costs in different states based on Insureon customers:

Insurance companies will generally consider your claims history to determine how risky your business is to insure. 

Companies that have made past liquor liability claims will pay more for insurance than those with a clean history, while past alcohol-related claims could increase your premiums.

Here are three steps you can take to reduce the cost of your liquor liability insurance coverage.

Businesses can sometimes find discounts when they purchase multiple insurance policies from the same provider, rather than a standalone policy. For example, if you own a small, low-risk business, you may qualify for a business owner’s policy (BOP).

A BOP bundles general liability insurance and commercial property insurance together at a reduced rate—and you can add liquor liability insurance as an endorsement. If you don’t qualify for a BOP, then you can add liquor liability as an endorsement to your commercial general liability policy.

Your liquor liability policy premium can typically be paid in monthly or annual installments. It might be tempting to go with a smaller monthly payment, but consider paying the full premium. Many insurers offer discounts on the full annual premium.

Insureon is the #1 independent agency for small business owners who need coverage from America's top insurance carriers. We help business owners evaluate their needs, buy policies, and manage their different types of policies online.

By completing Insureon’s easy online application today, you can compare liquor liability insurance quotes from top-rated U.S. carriers. You can also shop for general liability coverage, workers' compensation insurance, host liquor liability coverage, and all other types of business insurance. 

Insureon insurance agents are available to answer any questions about the best types of coverage options for your insurance needs.

Once you find the right policies for your small business, you can begin coverage in less than 24 hours and get a certificate of insurance for your small business.