Liquor Liability

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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.

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.

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.

Liquor liability insurance, therefore, is listed as separate insurance altogether. However, some GL policies allow liquor liability insurance as additional coverage.

Who Needs Liquor Liability Insurance?

Any business that profits from the sale of alcohol will need this type of insurance. This includes:

  • 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.

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 business general liability packages.

For example, if you’re an advertising firm that serves alcohol at a party and an intoxicated employee damages property or individual, any liability suits leveled against you will be under the host liquor liability insurance.

What Does Liquor Liability Insurance Cover?

This type of insurance protects you from the financial damages brought about by the following circumstances:

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 liability insurance will cover all the injured party’s medical, 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 case against you will be covered by this policy.

Legal costs

Should any case filed against you incur legal costs, this type of insurance 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 will be covered by this insurance policy,  as long as the amount is still within your policy limits.
  • 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 profit primarily by selling alcohol products.
  • 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.
  • 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.

To know exactly how much you will pay for this type of coverage, you would have to get a quote. Luckily, getting a liquor liability quote from Magnum Insurance is easy and hassle-free. All you have to do is reach out to us, and we’ll take all of 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, liability insurance just might be what will save your business from the damages of an unruly, overserved guest.

Interested to know more? Contact us today at Magnum Insurance!         

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