If your business serves alcohol, you may need liquor liability insurance. Depending on your state, you may be required to carry it. Also known as "dram shop insurance," liquor liability is typically not included in a business liability insurance policy. Business types that commonly carry liquor liability insurance include:
- Bars, pubs and taverns.
- Breweries and wineries.
- Caterers.
- Grocery stores, convenience stores and gas stations that sell alcohol.
- Liquor stores.
- Restaurants.
What does liquor liability insurance cover?
Liquor liability insurance covers lawsuits against a business for injuries and property damage. For example, if a patron drinks at your establishment and gets into an auto accident after leaving, your business could be held liable. A liquor liability policy can also cover assault and battery for incidents where intoxicated patrons get into a fight.
Liquor liability insurance typically includes the cost of a legal defense, judgments and out-of-court settlements, even if the business is found not to be at fault.
A business insurance agent can help you sort out the coverage your particular business might need.
Liquor liability insurance cost
Several factors can affect the cost of a liquor liability insurance policy, such as:
- Type of business: The volume of business you do in alcohol can affect the insurance cost. For example, a convenience store with less than 10% in liquor sales would typically pay less than a liquor store or bar.
- Claims history. If your business has a history of claims, expect to pay more for insurance.
- Location. If the business is located in an area with a high frequency of claims, you could pay more.
What is host liquor liability insurance?
Even businesses that don't make money from alcohol sales should consider potential lawsuits involving drinking. If your business hosts events where alcohol is served, host liquor liability insurance covers you for injury and property damage lawsuits. It's typically included with a business liability insurance. Host liquor liability insurance can apply to situations that include:
- Company holiday parties where alcohol is served.
- Companies that allow employees to bring in beer or wine to share on Friday afternoons.