Liquor Liability Insurance
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Dram shop laws in your state

The majority of states have dram shop laws that hold businesses liable for the actions of individuals who become intoxicated at their establishment.

What is a dram shop law?

The term “dram shop” refers back to when bars sold alcohol by the dram, a small serving typically less than a U.S. shot of liquor. A dram shop law is a state liquor law that places the blame for damages caused by intoxicated individuals on the establishment that served them.

In a state with dram shop laws, a business could have to pay damages for a drunk patron who gets into a fight with another customer, damages someone else’s property, or gets into a car accident – even if the incident happens elsewhere.

When do dram shop laws go into effect?

In most states with dram shop laws, your business is held liable when you serve a visibly intoxicated person. However, the law varies from state to state.

Because each state makes its own laws, and because these laws change over time, it’s important to research current dram shop laws in your state.

Examples of dram shop laws:


In Arizona, a business owner could be held liable if an employee sold alcohol to an individual who was obviously intoxicated or a minor.


In California, a business owner can only be held liable if an employee served an obviously intoxicated minor.


In Florida, a business owner cannot be held liable unless an employee served alcohol to a minor or a habitually addicted drinker.


In Illinois, a business owner can be held liable for any injuries or damages caused by an intoxicated individual who was served at the business.

The following states do not have dram shop laws:

  • Delaware
  • Kansas
  • Maryland
  • Nevada
  • South Dakota
  • Virginia

Do businesses in states without dram shop laws need liquor liability insurance?

Even in states without dram shop laws, anyone can file a lawsuit and take you to court over the actions of an intoxicated customer. Though the judge may be more likely to rule in your favor, you’ll still have to pay court costs and other legal fees. That’s why liquor liability insurance offers critical protection for any business that sells or serves alcohol.

Compare policies to meet your state laws and business needs

You can customize your liquor liability policy to match both your state’s laws and specific incidents that you want protection from. Talk to an Insureon agent to learn more about customizing a liquor liability policy to match your needs.

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Updated: July 7, 2022
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