Liquor Liability Insurance
What Is Liquor Liability Insurance?
Liquor liability insurance is designed to protect businesses that sell, serve, or provide alcohol if a customer or guest causes damage after being served. Think of it as coverage for every pour — just in case something goes wrong afterward.
What Does Liquor Liability Insurance Cover?
Short answer: Liquor liability insurance can cover your business when alcohol service leads to someone else getting hurt or property damaged.
Key inclusions:
- Third-party bodily injury or property damage caused by an intoxicated customer or guest
- Coverage if you overserve a customer or accidentally provide alcohol to a minor
- Legal defense and court costs, even if the claim is groundless (up to policy terms)
- Settlements or judgments you’re legally obligated to pay
- Incidents that occur off-premises after service (for example, a guest leaves and causes harm)
Liquor liability insurance usually won’t cover:
- Assault and battery (requires an assault and battery endorsement)
- Employee injuries (you need workers’ compensation for that)
- Accidental damage to your property (get inland marine for your movable business gear, or a business owner policy for protection at your brick-and-mortar location)
What Are Some Examples of Liquor Liability Claims?
Liquor liability claims can happen to even the most careful business owners. Here are some examples:
Intoxicated guest causes a crash
After last call, a patron you served drives off, hits another car, and injures someone. The injured driver sues you for allegedly overserving the driver.
Fight after heavy pours
Two customers you served get into a brawl, and a bystander is hurt. The bystander files a claim against you for serving alcohol irresponsibly. You need an assault and battery endorsement to cover an incident like this.
Mobile bartender at a wedding
A guest you served stumbles into a rented photo booth, breaking equipment and injuring the attendant. The vendor and attendant seek damages from your business.
In all of the above scenarios, liquor liability insurance could cover defense costs, damages awarded, or settlement fees to keep your business running.
Do I Need Liquor Liability Coverage to Host a Party Where Alcohol Will Be Served?
Whether you need liquor liability coverage depends on how alcohol is provided and what your venue requires:
- Private party, not selling alcohol (free drinks): Your host liquor coverage (often included in general liability or a special-event policy) may be enough
- Selling alcohol or charging admission: You typically need liquor liability insurance (not just host liquor)
- Venue or client requirement: If they ask for a certificate of insurance (COI) with liquor liability limits, you need proof of coverage with your business name on it
- Hiring a caterer or mobile bartender: Make sure they carry liquor liability and name you and the venue as additional insureds
- State and local rules: Permits and server compliance (ID checks) still apply and can affect coverage
Host Liquor vs Liquor Liability vs General Liability: What’s the Difference?
Liquor liability insurance is specifically designed for businesses that sell alcohol. Host liquor coverage is for hosting events with alcohol (not for sale), and general liability is broad coverage for your business operations.
| Coverage Type | Who It’s for | How It Protects |
|---|---|---|
|
Liquor Liability |
Businesses that sell/serve alcohol |
Covers third-party injury and property damage arising from alcohol service |
|
Host Liquor |
One-off events serving alcohol that’s not for sale |
Limited protection for alcohol service at non-selling events |
|
General Liability |
Every small business
|
Broad liability; alcohol-related claims are usually excluded unless host liquor coverage applies |
Coverage Type: Liquor Liability
Who It’s for: Businesses that sell/serve alcohol
How It Protects: Covers third-party injury and property damage arising from alcohol service
Coverage Type: General Liability
Who It’s for: Every small business
How It Protects: Broad liability; alcohol-related claims are usually excluded unless host liquor coverage applies
Coverage Type: Host Liquor
Who It’s for: One-off events serving alcohol that’s not for sale
How It Protects: Limited protection for alcohol service at non-selling events
Note: If you’re hosting an event and hire a professional bartender to serve guests, you should still have a host liability policy even if the bartender has their own liquor liability coverage to ensure all of your bases are covered.
What Types of Coverage Do Alcohol-Serving Businesses Need?
Alcohol-serving businesses typically need these core coverages:
- General liability insurance: Covers general third-party injuries and property damage
- Liquor liability insurance: Covers damages arising from alcohol service
- Assault and battery (A&B) endorsement: Often excluded in basic general and liquor liability coverage; best for businesses with high crowd risk
- Workers’ compensation insurance: Pays for job-related employee injuries
- Commercial property/business personal property insurance: Protects your physical business location and its contents (items used to operate your business)
- Commercial auto or hired/non-owned auto (HNOA) insurance: Covers accidents involving the vehicle you use for work (ideal for mobile food and beverage businesses)
Consider these optional coverages if your business is mobile:
- Inland marine: Covers your mobile business gear while you travel
- Additional insureds: Extends coverage to a venue or clients; commonly required with primary and non-contributory language, plus a waiver of subrogation
Depending on your unique risks, add these coverages, too:
- Umbrella or excess liability: Provides a higher amount of coverage
- Cyber liability: Helps you recover from cyberattacks on your business
- Employment practices (EPLI): Designed to cover hiring, firing, or harassment claims from employees
- Crime and employee dishonesty: Covers instances of employee theft
Learn more in our guide to small business insurance, or reach out to our team of licensed non-commissioned agents. They can guide you to the coverage options best-suited to your business and industry.
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