Does your business serve, sell, supply, or manufacture alcohol? If so, you should strongly consider a Liquor Liability Insurance policy (also known as Dram Shop insurance) to cover your business.
This Ultimate Guide contains information and frequently asked questions for businesses that serve, sell, or make alcoholic beverages. Lastly, we offer links to some of the top companies offering comprehensive Liquor Liability Insurance so you can choose wisely.
What is Liquor Liability Insurance?
A Liquor Liability Insurance policy is designed to cover the costs of legal and medical fees, as well as settlement amounts if an establishment is found responsible for serving a visibly intoxicated person, who then causes injury, damage, or death to others.
Who Needs Liquor Liability Insurance?
Any business that serves sells, supplies, or manufactures alcohol, including grocery and liquor stores, restaurants and bars, wedding destinations, breweries, brewpubs, and wineries to name a few, should all consider carrying a Liquor Liability Insurance policy.
Additionally, a Liquor Liability Insurance policy is usually a requirement for leasing a commercial space that sells, serves, manufactures, or distributes alcohol.
What Does Liquor Liability Insurance Cover?
Aside from providing liability coverage for people who become injured by an intoxicated person served in their businesses, Liquor Liability Insurance can also cover the cost of third-party property damage.
For instance, an intoxicated client leaves your bar and goes on to vandalize a nearby storefront. Liquor Liability Insurance can pay for the damages and legal expenses of being sued, but only up to your premium's limit.
Moreover, it can protect you from any legal action brought against you by an intoxicated person, who may go on to injure themselves after being served in your establishment.
For example, an underaged person is served in your bar, then goes on to have a serious accident. In this instance, the bar would be liable for not properly ID'ing the underaged person.
What Doesn't Liquor Liability Insurance Cover?
Liquor Liability Insurance is a very specific type of insurance with a limited scope of coverage. Liquor Liability Insurance is meant to augment existing business liability policies, not as a stand-alone policy for your business.
You should still hold a General Liability insurance policy, along with Commercial Vehicle insurance if you're in the business delivering alcohol too.
What's a Situation You Would Need Liquor Liability Insurance?
An example of when you might need a Liquor Liability policy would be if an intoxicated person stumbles into another patron at your restaurant, knocks them over, and breaks that person's arm. The injured person then sues the venue for her legal and medical expenses, as well as any damages.
A Liquor Liability insurance policy will cover the expenses of the injured person up to your policy's limit.
How Much Does Liquor Liability Insurance Cost?
How much your Liquor Liability Insurance premium costs is wholly dependent upon your policy limits. In general, Liquor Liability rates start at around $30 per month.
Where Can You Get Liquor Liability Insurance?
Liquor Liability Insurance is available from numerous insurance providers — brick and mortar as well as online. We've partnered with Next Insurance and their rates start at just $25 per month. Use our partner link to get a free quote.
Learn more about 12 other types of insurance. Take a look at our Ultimate Guide to Selecting Business Insurance.
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