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Alcohol is an interesting drink and certainly a profitable business niche. However, if you are in the business of dealing alcohol, your establishment is at risk of any alcohol-involved incidents and the claims that come with it.
In this case, liquor liability insurance will protect you from the worst of it.
This article will discuss everything you need to know about this specific type of insurance and how you can use it to protect your business.
Liquor Liability Insurance
Alcohol is an interesting drink and certainly a profitable business niche. However, if you are in the business of dealing alcohol, your establishment is at risk of any alcohol-involved incidents and the claims that come with it. This is where alcohol liability insurance, including options like liquor liability insurance in Florida, Texas, and California, becomes crucial. Additionally, considering liquor store insurance and liquor insurance can further protect your business.
In this case, liquor liability insurance will protect you from the worst of it.
This article will discuss everything you need to know about this specific type of insurance and how you can use it to protect your business, including insights into liquor liability insurance companies and liquor liability coverage.
What Is Liquor Liability Insurance?
Also called ‘Dram Shop insurance’ by some, this type of policy specifically covers businesses that sell alcohol from the liability of any incidents involving their craft. They must be in accordance with dram shop laws, whether you need liquor liability insurance in Florida, Texas, or California.
General liability insurance policies cover most businesses from general harms, including third-party harms, brought about by alcohol intoxication. However, general liability does not cover establishments that sell alcohol specifically from alcohol-related incidents, which is why alcohol liability insurance and liquor liability coverage are essential.
Liquor liability insurance, therefore, is listed as separate insurance altogether. However, some GL policies allow liquor liability coverage as additional coverage, or you might consider stand-alone liquor liability insurance.
Who Needs Liquor Liability Insurance?
Any business that profits from the sale of alcohol will need this type of insurance. This includes liquor stores, convenience stores, night clubs, fast food restaurants, delis, food trucks, and bartenders. For bartenders, specific bartender insurance or bartending insurance might be necessary.
- Alcohol manufacturers. Breweries, wineries, and distilleries.
- Alcohol distributors. Such as grocery stores, liquor shops, and supermarkets.
- Alcohol servers. This broad range includes bars, restaurants, taverns, caterers, and more.
Who doesn’t need liquor liability insurance?
If you don’t sell alcohol, this type of insurance doesn’t apply to you – even if you are liable for alcohol-related incidents. However, for those in Florida, Texas, or California, liquor liability insurance remains a critical consideration.
If you’re a business that has incidental alcohol exposure, this incident will be covered under the host liquor liability insurance, which is usually under most commercial general liability packages. This is particularly relevant for alcohol liability insurance for events.
For example, if you’re an advertising business that serves alcohol at a party and an intoxicated customer damages property or an individual, any liability suits leveled against you will be under the host liquor liability insurance, which is a form of alcohol liability insurance for events. This type of insurance is crucial if you need insurance for serving alcohol at an event.
What Does Liquor Liability Insurance Cover?
This type of insurance protects you from the financial damages brought about by the following circumstances, ensuring comprehensive liquor liability coverage and safeguarding against third-party claims.
Third-party bodily injury
If there is physical injury done by a customer within your premises, it will be covered under liquor liability insurance. For example, a drunk patron at your bar accidentally bumps into another patron, resulting in a bone fracture. This type of alcohol liability coverage will handle all the injured party’s medical expenses, legal, or settlement costs.
Third-party property damage
As the name implies, this covers damages done to your properties by a patron intoxicated from your establishment. If a drunk patron tried to drive a car and ended up rear-ending another individual’s car, the financial costs of any third-party claims against you will be covered by this policy for intoxicated customers.
Legal costs
Should any case filed against you incur legal fees, this type of liquor liability coverage will cover those financial expenses. This can include:
- Attorney fees.This is the professional fee that you give to any attorney representing your case in court. This fee can range from a few thousand to hundreds of thousands of dollars, depending on several factors. Your liquor liability insurance coverage will take care of these expenses, as long as they’re still within your policy limits.
- Legal proceeding costs.The expenses that you need to organize your defense will also be covered. This includes expenses such as expert witness fees and courtroom reservations.
- Administrative costs. Any logistical fees and expenses, such as court report reporters, office managers, etc.
- Settlement fees.Any settlement reached out of court or within the court, costs will be covered by this insurance policy, as long as the amount is still within your policy limits for lawsuit settlements.
- Judgments.If the court decides against your favor in the incident, your insurance policy will also cover the punitive damages and compensatory fees judged against you.
How Much Does Liquor Liability Insurance Cost?
The premiums you can expect to pay for liquor liability insurance will depend on several factors. These factors are:
- Exposure.Not all alcohol-related businesses have the same exposure. Grocery stores with 10% alcohol sales will not be required to pay as much as bars that sell or serve alcoholic beverages as their primary means of profit. The liquor sales percentage plays a significant role in determining the premiums.
- Business type.The type of risk you face will vary depending on what alcohol-related business you are in, so premiums also vary to reflect that. Whether you need liquor liability insurance in Florida, Texas, or California, the specifics of your liquor liability insurance will depend on your location and the nature of your business.
- Claims history.Businesses with a history of claims will pay more than businesses that have long been insured but haven’t made a single claim yet, a fact well-known among liquor liability insurance companies.
To know exactly how much you will pay for this type of coverage, you would have to get a liquor liability insurance quote. Luckily, learning how to get liquor liability insurance from Magnum Insurance is easy and hassle-free. All you have to do is reach out to us, and we’ll take care of all your insurance needs for you.
Getting Liquor Liability Insurance with Magnum Insurance
Liquor liability insurance is critical for those who profit from alcohol sales.
If you fall under this type of business, alcohol liability coverage just might be what will save your business property from the damages of an unruly, intoxicated customer.
Interested to know more? Contact us today at Magnum Insurance!
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