When there is a case of hit-and-run as a result of drunk driving, or other damages that resulted from young teenagers who used fake IDs to buy drinks at a bar and ended up damaging properties or causing other harm, the bar owner or the seller of the liquor will need insurance coverage that’ll protect them against such cases. If you’re a bar owner or intend to be one, you’ll surely need this coverage to be on the safe side, since there’s no stopping young teens and their fake IDs or drinking and driving.
Read further to learn about the cost, coverage, and the best liquor insurance providers.
Liquor Liability Insurance
Liquor liability insurance is the type of insurance that covers businesses that sell or serve alcohol. It covers property damage and bodily injuries caused by a drunk individual after being served some shots
This sort of business insurance, which is needed in most jurisdictions, covers legal fees, medical expenses, repair bills, settlements, and judgments if a business is held accountable for any booze-related problem.
Liquor liability insurance is often required for not just bars, but also, breweries, restaurants, liquor stores, convenience stores, wineries, grocery stores, and so on. Any firm that sells alcohol, no matter how little, is vulnerable to liquor liability and may profit from acquiring insurance. Keep in mind, however, that your business must be legally obliged to get this coverage before being granted a liquor license.
Just to Be Clear, What Exactly Does Liquor Liability Insurance Cover?
Well, just to be clear, liquor liability insurance covers drunk driving, assaults, and property damage.
A liquor liability insurance policy comes in handy when:
- An employee drinks on the job and causes bodily harm to another employee or damages company property
- A drunk customer attacks someone else just right outside your bar
- A young teen buys alcohol from your bar, gets high, and smashes a vehicle
- After your restaurant overserved customers, and someone gets injured right after
What Is Another Name For Liquor Liability Insurance?
Dram shop insurance is another term for liquor liability insurance. A dram shop is a bar or company that sells, serves, or manufactures alcohol. It also alludes to the dram shop laws that are in place in the majority of states.
Host Liquor Liability Insurance
Host liquor liability insurance protects your business against alcohol-related mishaps and liabilities that occur at events where you sell or serve alcohol. It’s your permit to party safely and responsibly.
Only firms that do not manufacture, sell, or serve alcoholic drinks are eligible for host liquor liability. It is meant to serve as a safety net for businesses when they host social events such as a corporate picnic or Christmas party.
Host liquor liability, which is frequently included as part of general liability coverage, allows small businesses to organize parties that involve alcohol while protecting themselves from blame. It makes no difference if the booze is offered for free, or a get-together at the office. If a guest overindulges and causes physical harm or property damage to a third party, host liquor liability insurance can cover court costs, legal fees, and settlements up to policy limitations.
Host Liquor Liability vs Liquor Liability Insurance
These two may appear to be the same, yet they are not. While host liquor liability only applies to social hosts, Liquor liability insurance policies are designed for enterprises that are in the business of producing, selling, or serving alcohol —
Though they both provide coverage for third-party harm or damage caused by alcohol-related events, they, however, don’t protect the same people. While host liquor insurance protects the organizers of special occasions, liquor liability protects the seller and the maker whenever something happens.
What Doesn’t Host Liquor Insurance Cover?
You may think that because you’re covered by host liquor liability, you and your attendees can go completely wild at every get-together, but you’re wrong. If you violate local or state liquor laws, you could face fines or jail time, and host liquor liability cannot save you.
Many places, for example, have laws prohibiting adults from giving or distributing alcohol to children. Even if no harm occurs, giving young teens alcohol could cause you a lot of problems, and that includes having your liquor license suspended, if not terminated.
Supplemental Liquor Liability Insurance Policies
Liquor liability insurance is frequently ideal when combined with other products your company may require. They are:
General liability: A commercial general liability insurance policy covers claims stemming from third-party property damage and physical harm caused by the business’s normal operations. If your organization creates alcohol that causes someone to become unwell, the risk will be covered by the general liability policy’s completed operations.
Workers’ compensation: Wet flooring, shattered glass, drunken clients, and a fast-paced workplace are all risks for restaurant and bar personnel. Because liquor liability insurance seldom covers employee accidents, some establishments must get workers’ compensation insurance.
BOP (Business Owners Policy): A business owner’s policy (BOP) combines general liability and first-party property for the real business (property and operations). Bundling these coverages into the BOP is frequently more cost-effective than purchasing them individually.
Is Liquor Liability Covered By General Liability Insurance?
A general liability insurance policy, often known as business general liability insurance, would most likely include host liquor liability insurance. If your company does not sell or serve alcohol but enables customers to consume it on its premises, such as during special events, general liability insurance can assist cover claims that your company caused physical harm or property damage.
However, liquor liability insurance is not covered in this policy and is a separate coverage. If your company sells, serves, or distributes alcohol, you must have this coverage.
Do Liquor Stores Need Liquor Liability Insurance?
Liquor establishments, like any other shop or convenience store that sells alcohol, face liability issues even if they do not serve customers. If you sell to a young person, sell to an intoxicated individual, or even merely sell the alcohol that someone ingested before getting into an accident, your business might be held accountable.
additional personnel training, as well as additional ID-checking software or processes, can assist limit such dangers. Of course, liquor liability coverage (even if included in a general liability or company owner’s policy) can assist protect you even further.
Best Liquor Liability Insurance Providers
After checking out a whole lot of insurance providers out there, we successfully came up with the following:
#1. Admiral
Since 1974, Admiral Insurance Group has provided insurance coverage to medium- and high-risk organizations. They currently have an AM Best financial stability grade of A+ (Excellent) and are a member of the W.R. Berkley Corporation.
You may get liquor liability insurance for your bar as a standalone policy or as part of a general liability policy. Coverage cannot be purchased online, and Admiral will not answer direct queries regarding your policy; instead, the firm depends on its broker network and will recommend you to a trustworthy agent in your region.
Admiral Insurance may be a smart choice to explore for your bar because many liquor liability policies prohibit businesses that stay open late or have live entertainment. They only have a few excluded classifications, which include establishments that operate as gentleman’s clubs, host under-21, and/or allow guns.
#2. Food Liability Insurance Policy (FLIP)
FLIP takes the top rank for best catering liquor liability coverage due to its inexpensive costs and coverage flexibility choices intended exclusively for caterers and other similar sectors.
Policies may be acquired online in minutes rather than waiting for a quotation or speaking with an agent. However, if you want assistance, FLIP is available by phone or via live chat on their website during normal business hours.
FLIP insurance is available in all 50 states and Washington, D.C., but liquor liability policies are not. You are also barred from coverage if your business works in a specific manner. Staying open later than 2:00 a.m., permitting drinking games, bottle service, or sponsoring any entertainment at your event(s), to mention a few examples.
FLIP provides liquor liability coverage for up to $1 million per incident and $2 million in the aggregate, depending on the policy levels you select. Additionally, assault and battery coverage of $25,000 is offered on yearly plans only.
A FLIP liquor liability policy may be obtained separately or in addition to your general liability coverage. Policies are valid for a year.
#3. Founders
If you run a bar, you are already aware of many risks to your business. Selling, serving, or distributing liquor to clients increases the danger; you might be held accountable if your workers serve a child or an intoxicated consumer and they leave your premises and cause an accident.
In 18 states, Founders Insurance provides monoline liquor liability coverage to safeguard your bar, even if you provide live entertainment, remain open late, or have a history of recent liability claims. As a result, Founders is ranked first for the finest liquor liability insurance for bars and restaurants.
Though Founders has been in business since 1901, it has only been offering insurance to firms in the hotel industry since the 1950s. They are headquartered in Des Plaines, Illinois, and have an A in the AM Best financial stability grade.
Founders’ monoline liquor liability coverage provides up to $1 million per incident ($2 million aggregate). While most states, except for Alabama exclude assault and battery coverage, up to $1 million in coverage can be added to your insurance for a fee.
Founders provide flexible risk acceptance, allowing coverage for restaurants that stay open late (relative to the state’s closing times), have past claims, feature live entertainment, and are new businesses. There is also no deductible for this coverage.
#4. Westchester
Westchester Binding provides a variety of insurance policies, including liquor liability coverage with amounts of up to $2 million. These policies are adaptable in terms of the sort of business that can acquire them. The assault and battery coverage has no sub-limit (except for adult clubs), and legal defense costs are not included in the coverage limitations.
Westchester offers liquor liability insurance as stand-alone products to a wide range of businesses, including bars, nightclubs, restaurants, retail stores, banquet halls, catering/bartending services, wholesale distributors, and private fraternal societies. Despite the fact that Westchester operates in all 50 states and the District of Columbia, liquor liability coverage is not available in all of them.
Policies are available whether you are licensed or not, although there are certain limits for specific sorts of companies, such as wineries, after-hours clubs, bottle service operations, and enterprises with a history of connected claims, to mention a few.
Westchester is a subsidiary of Chubb company. For further information and a price, please contact a Westchester representative.
#5. Markel
Since 1930, Markel has provided specialized insurance. Coverage is provided by a variety of insurers under the Markel umbrella, including SureTec, FirstComp, Essentia, and Markel American.
You may get liquor liability insurance from Markel Insurance for a range of activities, including hosting a corporate or organizational event, a private party, or a wedding. Host liquor liability insurance, with limits starting at $500,000, is automatically added to these special event plans, giving protection against bodily injury, property damage, and other risks. Because of its simplicity, it is ideal for hosts who do not require this coverage on a regular basis.
The best part of purchasing a policy from Markel is that it is straightforward and can be done totally online. You will be offered pricing as soon as you pick your policy coverage limits and desired features. If you want to get event liability insurance, you may do so up to one day before your event, which makes them one of the top host liquor liability coverage options. You may also get cancellation insurance 14 days before the event.
What Is the Cost of Liquor Liability Insurance?
Liquor liability insurance premiums vary greatly based on your organization or event, the length of coverage required, the number of visitors, the amount of alcohol sold, and other factors. Liquor liability insurance can cost hundreds to thousands of dollars each year for a small business purchasing annual coverage. The wide pricing gap is related to the varied degrees of risk that each type of organization may incur. For example, you can get coverage from Markel for a one-day event for as little as $75.
What Other Kinds of Liquor Liability Insurance May I Require?
You may tailor your liquor liability insurance policy by including coverage for particular risks like assault and battery claims or mental losses. You may also simply require short-term coverage, such as one that covers a bartender during a wedding or other event.
Depending on business requirements, you may be able to add this coverage to your general liability insurance policy or purchase it separately.
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