If you serve liquor to other people in any capacity, a restaurant or bar owner, a party or event host such as a wedding, or a bartender, you are potentially held liable for the damages that your intoxicated customers may cause without being aware of it. In such cases, in order to protect yourself and in some cases your business from these risks, you need to have liquor liability insurance. Let’s have a look at the details of everything you need to know about liquor liability insurance.
- How Much does Liquor Liability Insurance Cost?
- What is Liquor Liability Insurance?
- Types of Liquor Liability Insurance
- Who Needs Liquor Liability Coverage?
- What does Liquor Liability Insurance Cover?
- What doesn’t Liquor Liability Insurance Cover?
- The 4 Best Providers of Liquor Liability Insurance
How Much does Liquor Liability Insurance Cost?
Liquor liability insurance varies quite a bit depending on several factors:
- State laws
- How much alcohol you sell
- Claims history
Insureon estimates that liquor liability insurance ranges from $225 a year for retail, to $2,060 for bars. Be sure to compare quotes from several companies to find the cheapest one for you. Commercial insurance brokers like CoverWallet or Simply Business make it easier for you to compare several quotes in one place.
How can I Save Money on a Liquor Liability Policy?
There are a few things you can do.
- Bundle your policies. Buy your liquor liability policy from the same company you purchased general liability insurance.
- Provide employees with alcohol service training
- Make food readily available
- Pay your entire premium at once
What is Liquor Liability Insurance?
Liquor liability insurance is complex and can be confusing. Liquor liability insurance is defined as coverage for bodily injury or property damage that an intoxicated person causes after being served alcohol by a policy holder. The coverage on a liquor liability policy varies quite a bit from state to state because each state interprets who is legally liable for damages or injuries differently.
Types of Liquor Liability Insurance
There are actually a few types of liquor liability insurance in the market that you can choose from, depending on the nature of your liquor services:
- Liquor liability insurance for restaurants and bars
- Host liquor liability insurance
- Temporary event or one-time liquor liability insurance
Liquor liability insurance for restaurants and bars
If you run a bar or a restaurant, you hopefully already have general liability insurance. General liability insurance protects your business against bodily injury and property damage. However, coverage for alcohol-related incidents is very limited under general liability insurance, and in some states it’s not covered at all. This means if you run a bar or a restaurant, you need liquor liability insurance. Many states make it mandatory to get liquor liability insurance when you apply for a liquor license.
In many states, as a restaurant or bar owner, you need to have general liability insurance in place when you apply for liquor liability insurance. Insurance companies won’t let you have liquor liability insurance without general liability insurance.
Host liquor liability insurance
Host liquor liability insurance is usually included with general liability insurance. This protects someone who is not in the business of selling, serving or manufacturing alcohol from alcohol-related damages. For example, your accounting firm throws a company party and someone has one too many martinis. He then gets in his car and on his way home, hits another car, resulting in damage to the car and injury to the driver. In this case, general liability insurance should cover the accounting firm because they are not in the business of selling, serving, or manufacturing alcohol.
Host liquor liability insurance coverage only applies if you’re not charging for drinks. If you are charging for drinks, even by way of tickets to a party, you need liquor liability insurance.
Forty-three out of 50 states have what is called “dram shop liability” or social host liability laws on the books. This means your bar or restaurant could be held accountable for intoxicated patrons who injure people or damage property.
One-time liquor liability insurance or temporary event liquor liability insurance
What if you’re hosting a huge wedding and planning to serve alcohol? According to The Knot, getting a general liability insurance policy for your wedding is a good idea. It costs about $185 and includes $1,000,000 worth of coverage for accidents, including alcohol-related accidents. You can also purchase a “temporary event” or one-time liquor liability insurance policy. The cost depends on how many people are attending and how long the event will last.
Keep in mind, though, if you are holding your wedding at a banquet hall or restaurant, they likely have liquor liability insurance already. Wedding insurance may be helpful if you’re hosting a wedding in your backyard, a park, or in a venue that you own.
If you bartend for events occasionally, be sure to look into and get a bartender insurance policy to protect you from risks involving serving and over-serving people with alcohol.
Who Needs Liquor Liability Coverage?
- Breweries and wineries
- Grocery stores (if they sell alcohol)
- Liquor stores
What does Liquor Liability Insurance Cover?
Liquor liability insurance protects you in case you serve someone who is intoxicated and then they go out and cause injury to someone or damages to someone’s property. Liquor liability insurance can cover:
- Third-party bodily injury
- Third-party property damage
- Legal costs
- Additional claims, such as assault and battery.
What doesn’t Liquor Liability Insurance Cover?
Liquor liability insurance doesn’t cover everything. It won’t cover:
- Damage to your own property
- Advertising injuries
- Any claims that involve under-age drinking
The 4 Best Providers of Liquor Liability Insurance
- Insureon – Best for Liquor Liability Policy Recommendation
- Food Liability Insurance Program (FLIP) – Best for Immediate Coverage of Liquor Liability
- Coverwallet – Best for Comparison Shopping of Liquor Liability Insurance
- Markel Insurance – Best for Event or One-Day Liquor Liability Insurance
Insureon: Best for Liquor Liability Policy Recommendation
Insureon is an aggregate, much like Coverwallet and Coverhound that you can use to enter information about your business and they will try to get you a quote from multiple sources. State laws on liquor liability vary quite a bit by how strict they are, so it’s best to do a search for your own state.
Insureon does offer a lot of very helpful information on their website, so they’re worth looking into for a quote.
Unsure of what you need? Simply call Insureon and they will be able to walk you through the process and figure out exactly what policies and how much insurance you need.
We tried to secure a quote from Insureon for a bar based in Colorado, but they were unable to provide us with one.
Food Liability Insurance Program (FLIP) – Best for Immediate Coverage of Liquor Liability
Food liability insurance program can offer you a policy if you have a business and need an annual policy combined with general liability or, if you need a one-to-three day policy to cover an event.
They can provide insurance for almost anyone who works with food and/or alcohol, like food trucks or trailers. You can customize any policy to suit your needs,
They have instant coverage and you’ll have immediate access to your insurance certificates. Also, they’re licensed in all fifty states. They are worth a look if you need any kind of liquor liability insurance.
Coverwallet – Best for Comparison Shopping of Liquor Liability Insurance
Coverwallet is licensed in all fifty states and prides themselves on their convenience and ease of getting customers a policy they can live with.
Coverwallet takes your information and then, working with a variety of insurance companies, generates quotes from a few so that you can compare them.
Although they were unable to give us a quote, they usually give at least three.
Markel Insurance – Best for Event or One-Day Liquor Liability Insurance
If you need insurance for a one-time event such as a wedding, Markel insurance is a good bet. They have reasonable prices, and the online quote system is simple. We got a quote in less than a minute for a wedding scheduled six months away.
Markel’s specialty is specialty insurance. They have customizable policies and offer a variety of discounts. They have everything from horse insurance, event insurance, to snowmobile insurance.
Liquor liability insurance is a necessity for any business that serves alcohol. Make sure you have a policy in place before something happens. Likewise, if you’re hosting an event, you can be held liable in most states, so it’s best to get host liability insurance. Don’t let your excitement preclude your responsibility. After you get host liability insurance, remember to have fun.