Last Updated on January 15, 2025 by Caesar
Running a pub, bar, or tavern comes with inherent risks related to serving alcohol. Businesses that serve alcohol need insurance to safeguard themselves against potential issues caused by intoxicated patrons. Liquor liability insurance is helpful for businesses like bars, restaurants, and liquor stores that face these risks. Here is everything to know about this type of insurance cover:
Coverage
Many insurance providers offer either extended or standalone liquor liability insurance. An extended policy is combined with other coverage types, such as general liability. A standalone policy offers specialized coverage for specific situations arising from serving alcohol. These situations might include driving under the influence, assault and bodily harm, slips, falls, and trips. The coverage further assists the business owner in a drawn-out legal situation that accumulates fees for representation.
Dram Shop Laws
Dram shop laws are state regulations that hold businesses serving alcoholic beverages accountable for their patrons’ actions. These laws exist to reduce alcohol-related incidents by encouraging responsible service. Many states have different dram shop laws, which affect local providers’ coverage. Some states have strict rules allowing people harmed by intoxicated customers to sue the establishment. Other states have more lenient laws that hold businesses liable only if they serve minors or habitual intoxicated consumers.
Overserving
Overserving refers to providing alcohol beyond the reasonable limits of any guest in the establishment. This may include instances where the patron came to the store or bar visibly impaired but was still served alcohol. An employee increasing the orders of an already drunk customer also applies in this situation. One way to avoid overserving is to train personnel to examine customers before serving them further. This reduces complications during the claim process if a guest causes an incident.
Minor Sales
Providing alcohol to clients under the legal drinking age reduces the establishment’s compensation chances. Every business requires a strict vetting protocol to confirm the identification of each visitor, such as ID checks. The vetting serves as an opportunity to show that the business is concerned about following the state’s dram shop laws.
Property Damage
Liquor liability policies cover fights among one or more guests that result in property damage. This enables the company to offset any replacement or repair costs caused by intoxicated customers. Property damage only includes third-party assets outside the establishment’s management, such as other customers’ vehicles in the parking lot. It also covers damage to the building, appliances, or decorative elements.
Benefits
Liquor liability coverage gives businesses peace of mind when operating such establishments. They only need to follow dram shop laws and file for compensation if a situation escalates due to a reveller’s actions. The owner also instills discipline in the employees so they do not serve intoxicated people or minors to comply with the law. This shows professionalism due to the commitment to safety and compliance, which strengthens professional relationships with stakeholders.
Get Liquor Liability Insurance
Liquor liability insurance signifies an investment into the stability of a business with inherent risks in the alcoholic beverages industry. Find a policy giver serving your state, as they understand your region’s dram shop laws. Consult the insurance provider today to secure your business against litigation losses.