5 Ways to Limit Liquor Liability Losses
- Limit the number of available bartenders to make it harder for patrons to acquire too many drinks in a short period of time
- Ensure that your employees are trained in safe alcohol service techniques
- Establish guidelines for how employees should deal with intoxicated customers
- Provide free or inexpensive food as this will slow the absorption of alcohol
- Purchase a liquor liability insurance policy
What Is Liquor Liability Insurance?
Any business that sells or serves alcoholic beverages, including restaurants, nightclubs, and bars, can be held liable for damages or injuries caused by intoxicated patrons. This can include damages that result from fights, careless behavior or even automobile accidents. While it may seem logical to place the blame fully on the individual who perpetrated these acts, the establishments that allowed them to become intoxicated are also held largely liable and can be sued for exorbitant sums of money, particularly if resultant injuries are severe or fatal.
Fortunately, you can protect your business from large financial losses with a liquor liability insurance policy. These policies are sometimes included with general liability coverage in some business insurance policies, but most often they need to be purchased separately as stand-alone coverage or as a business policy endorsement.
Is Liquor Liability Insurance Required?
Most states require all establishments that serve, sell or assist in the purchase of alcohol to carry liquor liability insurance. Even if your business is located in a state that does not mandate this coverage, you may be required to carry it by your financial institution if you have taken out a large business loan or by your landlord if you rent the space in which your business is located.
This insurance is one that is particularly important to bars, taverns and nightclubs. It may mean the difference between maintaining a lucrative business and closing your doors should you ever face a liability lawsuit.
What Does Liquor Liability Insurance Cover?
Liquor liability insurance will cover your business for personal injuries and property damages for a liability lawsuit. Even if your business is found to have acted properly and the liability suit is dropped, your business could accrue high charges for legal defense fees and court costs. Fortunately, liquor liability insurance covers these expenses as well.
You will want to be certain that assault and battery coverage is included as part of your liquor liability coverage. This may be necessary if an alcohol-fueled brawl breaks out in your establishment, or if a bouncer causes injuries to unruly patrons while escorting them out of the bar.
Liquor Liability Insurance for Weddings and Social Events
Consumers may also purchase a one-time liquor liability policy to cover them for charges that may stem from alcohol consumption at a special event that they are hosting. This can include weddings, fundraisers and reunions. This insurance, also known as host liquor liability, is necessary if you are catering the event yourself or if the catering company or venue does not have liquor liability coverage.
The cost of host liquor liability is based on the number of people that will be in attendance, the types of alcoholic beverages that will be served and how long the event will last. Events that feature cash bars over open bars will have lower coverage costs as people are not likely to drink as much.