Reliable coverage and dependable service
Liquor liability insurance is business insurance that protects your business
against loss or damages claimed as a result of a patron of your business becoming
intoxicated and injuring themselves or others. If your business manufactures,
sells, serves, or facilitates the uses or purchase of alcohol, then your business
may need this coverage.
Liquor liability coverage may be sold as an add-on to a commercial liability
policy or as a separate liability policy. But, if you do not purchase this
extra coverage your standard liability policy DOES NOT protect your business
against these kind of claims.
This coverage is expensive - depending on your location - and it is estimated
by experts that only 35% of businesses that should have this coverage actually
purchase this coverage. Part of this is because of misconceptions that exist
in the hospitality industry regarding the industry's liability risks for intoxicated
patrons. That issue is a topic in itself. Part of this is because the insurers
continually add exclusions to the point that this coverage is seen as having
If you live in a state with a "dram shop liability" statute, then purchase
this insurance if your business will manufacture, sell, serve, or facilitate
the use of alcohol.
What to look for/ask for in a liquor liability policy:
- Assault and Battery Coverage - Most claims against bars and restaurants
are the results of fights. Your liquor liability policy should include coverage
for assault and battery claims. If not, the policy has a much lower real
- Defense Costs Included - The biggest cost facing your business
in these types of claims is the cost of retaining a lawyer against frivolous
claims. Insurers know this. That is why they sell policies where "defense
costs" are deducted from the total coverage. That is, your $500,000 policy
is reduced to $400,000 because of $100,000 in attorneys' fees. Frankly,
even with a lower premium, pass on the policy if it does not provide your
business with skilled, appointed legal counsel that does not reduce coverage.
- Employees Included - If you serve, then employees will drink regardless
of the rules. Insurers know this and sometimes exclude employees from coverage.
Make sure employees are covered as patrons.
- Damage Definition Includes Mental Damages - Claimants may claim
they were damaged in non-physical ways: stress, mental anguish, or psychological
damage. Some policies exclude these types of damages. Don't purchase a policy
with limited damage definitions.
- Reduced Premiums Based on Safety and Claims - Good insurers who
are market leaders in bar and restaurant insurance will offer free classes
and training to their insureds employees and discounts on premiums for having
safety training and no claim history. Some insurers will reduce premiums
by 15-20% for this basic safety training.
As a final note, liquor liability insurance WILL NOT cover sales that are
contrary to law and sales to minors.
Our focus is on:
- Accessing your insurance requirements
- Matching your needs with the right kind of coverage
- Providing the highest level of coverage for the lowest cost