If your business sells, serves, and distributes alcohol, you need liquor liability coverage. Risks and liabilities can occur in your establishment because you host patrons. If an accident happens related to alcohol consumption, you can be held accountable for these damages. You need adequate insurance for bars to help protect your business.
What Is Liquor Liability Insurance?
Liquor liability insurance is also known as dram shop insurance. This type of insurance covers claims of property damage and bodily injury that an intoxicated patron causes after your business sells them alcohol. If your establishment gets sued, this policy can cover:
- Legal expenses
- Settlements or judgments
- Medical costs for injuries
- Repair costs for property damage
Liquor liability insurance can cater to claims of assault and battery when a customer you served alcohol hurts another person physically. The coverage can also cover claims of drunk driving when an intoxicated patron your business served or sold liquor to causes an accident.
Businesses That Need Liquor Liability Insurance
Many states across the U.S. require businesses selling, serving, and distributing alcohol to have liquor liability coverage. Here is a list of some establishments that need this coverage:
- Bars and taverns
- Restaurants
- Liquor stores
- Breweries and wineries
- Grocery stores
- Caterers
Some of these businesses can be more high-risk than others, meaning they need more coverage. Fights are more likely to break out in bars and taverns, compared to wineries. An insurance agent can assess your risk exposure and suggest the right policy for your business.
Why These Businesses Need Liquor Coverage
Dram shop insurance can be beneficial for your restaurant, bar, nightclub, or liquor store in the following ways:
Manages Legal Liability
If you reside in a state with dram shop laws, you can be held legally liable when an intoxicated person you served alcohol to harms themselves or others. You can face lawsuits due to bodily harm. Some patrons can sue you for stress, psychological injury, and mental anguish related to bodily injuries. Fighting a legal battle can consume your time and money. A liquor liability policy can pay for court fees, attorney fees, settlements, and other hidden charges.
Covers Property Damage
Intoxicated individuals drinking in your establishment can damage other people’s property. Drunk patrons can hit other people’s vehicles and lead to costly losses. If you don’t have insurance, your business can be held accountable for such damages and you can be obligated to pay certain fees. Protect your establishment from financial losses by getting liquor liability coverage.
Covers Physical Injuries
When people under the influence of alcohol harm themselves or others within your business, you could be held liable. Liquor liability insurance for bars can protect you from paying costly medical bills after fights.
Without liquor liability insurance, you can lose your license for serving alcohol to intoxicated customers. Your business’s reputation can suffer damage, leading to loss of revenue and customers.
The Cost of Liquor Liability Insurance
Liquor liability insurance rates can differ due to the following aspects:
- Coverage limits
- Claim history
- Business type
- Business location
- Percentage of sales
- Insurance carrier
The cost of liquor liability coverage can depend on the claims history — if you have a high history of claims your premiums can increase. High-volume nightclubs can pay more costly premiums than small bars. If your business is located in a city, your insurance can be pricey because the location increases the risk of alcohol incidents.
The amount of alcohol your business sells impacts your insurance rates. If you record high sales, you can pay for high premiums since more sales can mean alcohol-related incidents. Coverage limits can affect your premium charges. High coverage limits can result in high premiums.
Businesses that have risk management practices can lower their rates. Staff training and routing ID checks can reduce liquor liability insurance premiums. You can bundle up your insurance to reduce rates or hire an agent to shop for favorable rates.
Choose the Right Insurance Policy
Choosing the right liquor liability insurance policy is an important decision for any business that serves or sells alcohol. This type of insurance can protect a business from financial losses that may arise from claims related to alcohol-related incidents, such as property damage, injuries, or accidents. Here are some factors to consider when choosing a liquor liability insurance policy:
Coverage Limits: The coverage limits of the policy should be sufficient to cover potential losses. Higher coverage limits may be necessary for businesses that serve or sell alcohol in high-risk areas or during peak hours.
Premiums: The cost of the policy is also an important consideration. It is important to balance the cost of the policy with the amount of coverage needed. Some policies may offer discounts for businesses that have certain safety measures in place, such as training programs for employees.
Policy Exclusions: It is important to carefully review the policy to understand what is covered and what is not covered. Some policies may exclude coverage for certain types of incidents or situations, such as fights or criminal activity.
Policy Limits: Some policies may have limits on the amount that can be paid out for each incident or claim. It is important to choose a policy with adequate policy limits to ensure that the business is fully protected.
Insurance Provider: It is important to choose an insurance provider that has experience working with businesses in the industry and a reputation for providing quality coverage and customer service.
Legal Requirements: Businesses should also consider any legal requirements for liquor liability insurance in their jurisdiction. Some states may require businesses to carry a certain amount of coverage or may have other specific requirements for coverage.
Get Reliable Insurance for Bars
Bars, restaurants, wineries, liquor stores, and grocery stores need liquor liability coverage to protect businesses from lawsuits, property damage, and financial losses. Get a reliable insurance policy that is within budget and safeguards your business adequately. An agent can help you find customized coverage, depending on your needs, business type, and location.
