Why Bars and Nightclubs Need Liquor Liability Insurance

Selling alcohol is a lucrative part of many business operations, but they must protect themselves from the associated risk. When people are under the influence of alcohol, their behavior is often unpredictable. Let us explore the need for a Liquor Liability Insurance policy and what it covers.

Who should carry a Liquor Liability policy?

Any business that makes, sells, distributes, or serves alcohol to customers needs to secure a Liquor Liability Insurance policy.  Pay particular attention to businesses in states with dram shop laws, which allow licensed establishments to be held liable for selling or serving alcohol to individuals who cause injuries or death because of their intoxication.

Some of the common businesses that need Liquor Liability Insurance include:

  • Bars and taverns
  • Restaurants
  • Social and fraternal clubs
  • Organizations that hold fundraisers where alcohol is sold
  • Liquor stores
  • Grocery and convenience stores
  • Catering companies

What does Liquor Liability Insurance cover?

  • Assault and battery if a customer you served alcohol to physically hurts another person
  • Third-party property damage that a customer under the influence of alcohol causes to another person’s belongings
  • Third-party bodily injury if a patron who became intoxicated at your business injures another person
  • Drunk driving if an intoxicated person your business served or sold alcohol to damages property or causes an accident 
  • Medical bills to treat an injury
  • Legal costs, including settlements and judgements

*These policies do NOT cover libel and slander, damage to your business property, or incidents related to underage drinking.

Liquor Liability Insurance policies can be tailored to fit your business. A bar owner may wish to add assault and battery coverage for additional limits of protection. You can also secure coverage for specific incidents of violence, claims of mental damages, and more.

Sandra Haley, Senior Vice President of Underwriting and Marketing at Hospitality Insurance Group, notes that the majority of liquor claims result from assault and battery where patrons are not drunk, but they happen to be in a bar when they get into a fight. As a result, many companies have made coverage for assault and battery “not as readily available.”  It is important to check the limits that you receive for assault and battery on your standard Liquor Liability Insurance policy.

Jencap’s team of experts ensures your clients get the new or updated Liquor Liability coverage they need at a competitive rate. Contact us for a quote today.

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