Liquor Liability Insurance

Serving alcohol can be a valuable part of running a successful restaurant, bar, brewery, nightclub, or other hospitality business, but it also introduces unique risks. Liquor liability insurance, also called dram shop insurance, pays for lawsuits claiming your business served alcohol to someone who then hurt another person or damaged property. If a guest leaves after one drink too many and causes a crash, this is the policy that responds. Most general liability policies exclude these claims for any business that sells or serves alcohol, so restaurants, bars, nightclubs, hotels, caterers, and retailers need separate liquor liability coverage.

At Tabak Insurance Agency, we provide affordable liquor liability insurance for restaurants, bars, nightclubs, catering companies, and other hospitality businesses. Whether you’re opening a new establishment or reviewing your current coverage, our team can help you find a policy that fits your business and budget.

 

GET A QUOTE FOR LIQUOR LIABILITY INSURANCE TODAY

 

What Liquor Liability Coverage Pays For

When a claim ties someone’s injury or property damage to alcohol your business served or sold, liquor liability coverage can pay for:

• Legal defense: Attorney fees and court costs, even when the claim has no merit.
• Settlements and judgments: What you owe an injured person, up to your policy limits.
• Medical bills: Treatment for people hurt by an intoxicated guest.
• Property damage: Repairs to cars, buildings or other property that belongs to someone else.

Common claims include drunk driving crashes after a guest leaves, injuries to other patrons and sales to underage customers. How far your exposure reaches depends on your state’s dram shop law. Our guide to how dram shop liability insurance protects bars explains how those lawsuits work.

 

What Liquor Liability Coverage Pays For

Liquor liability coverage helps protect hospitality businesses from a variety of alcohol-related claims that may arise after serving alcoholic beverages, such as drunk driving, slips and falls, fights, or sexual harassment/assault. While it will cover damage to other individuals’ property, it does not cover damage to your own property. When a claim ties someone’s injury or property damage to alcohol your business served or sold, liquor liability coverage can pay for:

• Legal defense: Attorney fees and court costs, even when the claim has no merit.
• Settlements and judgments: What you owe an injured person, up to your policy limits.
• Medical bills: Treatment for people hurt by an intoxicated guest.
• Property damage: Repairs to cars, buildings or other property that belongs to someone else.

Common claims include drunk driving crashes after a guest leaves, injuries to other patrons and sales to underage customers. How far your exposure reaches depends on your state’s dram shop law. Our guide to how dram shop liability insurance protects bars explains how those lawsuits work.

For example, liquor liability insurance for restaurants may provide protection if:

• A restaurant continues to serve a couple past the point of visible intoxication, and they hit another car while driving home drunk.
• A venue hosts an event with a BYOB policy on alcohol, then a guest becomes drunk on the premises and gets in a fight that incurs medical bills.
• An independent bartender works a special event at a popular nightclub and serves alcohol to patrons, then those patrons get drunk and cause damage to the nightclub property.

What Liquor Liability Insurance Does Not Cover

It does not pay for damage to your own building or inventory, which falls under commercial property insurance, or for injuries to your staff, which fall under workers’ compensation. Fights are the gap to check first. Some policies exclude assault and battery claims, and others cap them at a lower sublimit. A fight can be filed against either your liquor liability or general liability policy, so ask for assault and battery coverage on both.

Why General Liability Does Not Cover Alcohol Claims

The standard commercial general liability form most carriers use includes a liquor liability exclusion. It removes coverage for alcohol-related injury claims against any business that makes, distributes, sells, serves, or furnishes alcohol. If alcohol is part of what you sell, your general liability insurance will not respond to a dram shop lawsuit.

Many carriers let you add liquor liability to a general liability policy as an endorsement, and some also sell it as a separate policy. When it is added on, some carriers require your general liability limits to be equal to or higher than your liquor liability limits.

Businesses that provide drinks without selling them, such as a company holiday party, usually have host liquor coverage under general liability instead. Our article on six times host liquor liability coverage can help show where that line falls.

Who Needs Liquor Liability Insurance?

Any business that earns money from alcohol should carry it. We write liquor liability insurance for:

• Restaurants and food trucks that serve beer or wine
• Bars and taverns
• Nightclubs and lounges
• Hotels and motels with a bar, restaurant or room service
• Caterers, mobile bars and bartending services
• Liquor stores, convenience stores and other retailers that sell packaged alcohol
• Breweries, wineries and taprooms

Coverage is often a condition of doing business. Some states require it to get or renew a liquor license. Landlords, lenders and event venues often write it into leases and contracts, and many venues ask a caterer or mobile bar for a certificate of insurance before the event.

What Affects the Cost of Liquor Liability Insurance

There is no flat rate. Carriers price each policy on how much alcohol you sell and how you sell it, and these factors carry the most weight:

• Liquor sales: Annual alcohol receipts and the share of total revenue that comes from alcohol.
• Type of business: A nightclub rates higher than a restaurant where most guests order food, and a package store rates differently than an on-premises bar.
• Hours and entertainment: Late closing, live music, dancing and drink specials add exposure.
• Location: States with broad dram shop laws tend to cost more.
• Claims history: Past lawsuits and liquor law violations raise your premium.
• Limits: Higher limits cost more, and some leases and contracts set a minimum.

How to Lower Your Liquor Liability Risk

Fewer incidents mean fewer claims, and some carriers credit businesses that can show these practices:

• Train every server and bartender through a responsible alcohol service program your state recognizes. In Texas, requiring TABC-approved seller training can help protect your business from liability for an employee’s illegal sale.
• Set a clear ID policy and use an ID scanner at the door.
• Put your cut-off policy in writing so staff know when and how to stop service.
• Log incidents the night they happen, with names, times and witnesses.
• Make rideshare and taxi options easy for guests to find.

If a violation has already cost you your license, read our guide to regaining a revoked liquor license.

Get Liquor Liability Insurance Coverage for Your Business

If you own a bar, restaurant, or another hospitality business where you sell or serve alcoholic beverages, protect your business with affordably priced liquor liability coverage from a trusted insurer. We also offer a variety of other insurance packages, including bar insurance, nightclub, and restaurant insurance policies. At Tabak Insurance Agency, we’ve saved our clients an average of 20% on their insurance premiums over the past two years alone. Contact us or call us today to receive a personalized quote and learn how the right liquor liability insurance coverage can help protect your business.

 

GET A QUOTE FOR LIQUOR LIABILITY INSURANCE

 

FAQs About Liquor Liability Insurance

What does liquor liability insurance coverage include?

Liquor liability insurance coverage pays for legal defense, settlements, judgments and related costs when someone claims your business served or sold alcohol to a person who then injured someone or damaged property. It does not cover your own property or your employees’ injuries, and assault and battery coverage may need to be added.

Is liquor liability insurance required?

It depends on your state and your contracts. Some states require it to get or renew a liquor license, and landlords, lenders and event venues often require it. Even where it is optional, a general liability policy usually will not pay a dram shop claim against a business that sells alcohol.

How much does liquor liability insurance cost?

Price depends on your alcohol sales, the share of revenue from alcohol, the type of business, hours, entertainment, state, claims history and the limits you choose. Call 800-806-0689 or request a quote online for pricing on your business.

Does a liquor store need liquor liability coverage?

In most cases, yes. Depending on state law, a store that sells packaged alcohol can be sued if it sells to a minor or a visibly intoxicated customer who then causes harm. Package stores are rated differently than bars because customers drink off the premises.

Do caterers and mobile bartenders need liquor liability or host liquor coverage?

Liquor liability. Host liquor coverage is meant for businesses that provide alcohol without selling or serving it as part of their work. A caterer, mobile bar or bartending service that pours drinks for clients is in the business of serving alcohol and needs its own liquor liability policy. Event hosts often ask to be named as additional insureds.