How To Get Liquor Liability Insurance

If your business is involved in the selling, serving, or distribution of alcohol, it may be necessary to invest in liquor liability insurance. A liquor liability insurance policy protects against claims of property damage or bodily injury that create after a person who is drunk is served alcohol by your company.

What Is Liquor Liability Insurance?

A liquor liability insurance policy protects businesses that sell or provide liquor. It pays out for property damage and bodily injuries brought on by a drunk client after you serve them or provide them with liquor.

This type of business insurance, which is required in most states, covers legal costs, medical bills, repair bills, settlements and judgments if your business is liable for a liquor-related problem. Liquor liability insurance is also called dram shop insurance.

What Does Liquor Liability Insurance Cover?

Liquor liability insurance provides coverage for claims of drunk driving, assault and battery, and property damage law.

Here are a few examples of when liquor liability insurance can help you:

• A victim gets into an accident after you over-served them at a restaurant. 
• A minor buys alcohol at your store, becomes drunk and crashes a vehicle through a shop window. 
• An overserved patron attacks someone outside of your business. 
• A worker drinks at the job and causes injury or property damage to a person else.

A liquor liability insurance coverage policy can help if your business is sued:

• Judgments, settlements, and legal costs. 
• Medical bills. 
• Expenses to repair or replace vandalized property.

What Does Liquor Liability Insurance Not Cover?

Liquor liability insurance does not cover property damage to your business as a result of an intoxicated patron. For your property protection, such as your property, inventory and equipment, you will need commercial property insurance.

Who Needs Liquor Liability Insurance?

Liquor liability insurance coverage is advised for many companies that offer or sell alcoholic beverages. Depending on your state, you may need a liquor liability policy to obtain a liquor license for your small business.

Examples of businesses that may face liquor-related liability include: 

• Bars and taverns
• Breweries and wineries
• Caterers
• Grocery stores
• Liquor stores
• Restaurants

States without dram shop laws

A dram shop law is a nationwide rule that requires sellers of alcohol to ensure that their products cannot cause injury or damage. Many states have such a law, with regulations varying by state. but these states don’t:

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

Liquor Liability Insurance Cost

The median annual cost for liquor liability insurance is $2,060 for bars and $545 for restaurants, according to Insureon.

Your liquor liability insurance costs depend on several key factors, including:

• Coverage limit. The more coverage you have, the more expensive your liquor liability insurance will be. 
• Liquor sales. Some of your liquor sales influence the cost of your insurance policy. 
• State. Like other forms of insurance, your place of business may affect the cost of your liquor liability insurance.
• Industry. Industrys that use alcoholic beverages are considered riskier and pay higher premiums than other industries. A restaurant that's known to serve alcohol will cost more for insurance than a small shop that hosts occasional wine tastings.
• Claims history. If your previous liquor liability claims are high, your premium will be going up.

How to Get the Best Liquor Liability Insurance

Countless companies provide liquor liability insurance, so it's smart to compare price quotes from a number of insurance companies in order to get the best deal. A solid starting point is your insurer for other types of coverage.

You can normally add liquor liability coverage to a general liability insurance policy. You can also purchase liquor liability coverage or add it to a businessowners policy (BOP).

Ask insurance agents who specialize in small business insurance about a company's liquor liability coverage. You can also get quotes online.