If you are considering starting an alcohol-serving business, then you have probably spent some time looking at dram shop insurance.
Insurance can be tricky, though, with all the different policies, providers and coverage limits. Heck, you may even be wondering if your business even needs insurance. Well, the answer to that question is: yes!
As for the other questions you might have about insurance, you’re in luck, because your friends at Insurance Canopy are here to give you a hand.
Let’s dive deep into dram shop insurance—what it is, why you need it, and what coverages you can get today to financially protect your business from claims.
What Is Dram Shop Insurance?
Dram shop insurance is a liability insurance plan designed to protect alcohol-serving businesses from the risks associated with their industry.
Alcohol-serving businesses, or dram shops as they were called back in the day, face a variety of risks, including bodily injury and property damage claims that arise from your business operation as well as bodily injury and property damage claims caused by individuals you served alcohol to.
Liability claims can be expensive, especially when they are caused by an alcohol-related accident. They can often cost a business hundreds of thousands of dollars or more to resolve. With dram shop insurance, you can mitigate and in some cases eliminate the out-of-pocket cost your business may be required to pay when faced with a claim.
Does My Business Need Dram Shop Insurance?
As an alcohol-serving business, your business has risk. In the insurance world, this means there is a chance that something harmful or unexpected could happen to you, your business, or other people as a result of your business operation. If an accident involving your business occurs, you could be held legally liable to pay for it.
Additionally, according to state dram shop laws, your business could also be held liable for accidents caused by individuals you served alcohol to, whether your business was directly involved in the accident or not.
For example, if one of your patrons went on to cause an automotive accident, you could be found liable to pay for the injuries and damages of those involved.
Alcohol related accidents can be very common and very expensive to resolve. Cases involving death or serious injury can often cost hundreds of thousands of dollars or more. With the right dram shop insurance coverage, you can protect your business from the crippling cost of claims, allowing you to continue running your business with peace of mind.
What Policies Do I Need to Protect My Business?
At the bare minimum, your liability insurance plan should include liquor liability, which is a policy specifically designed to mitigate the cost claims arising from liquor-related accidents. For example, Insurance Canopy’s dram shop insurance plan provides $300K in coverage for liquor liability with options to increase your coverage up to $2M.
That said, liquor liability insurance is not the only policy an alcohol-serving business should have. Here are a few more policies you may want to include in your business’ insurance plan.
A general liability can protect your business from the cost of third-party claims that arise when someone or something was injured or damaged either on your premises or as a result of your business operation. It also covers copyright and personal advertising injury claims.
Most liability insurance plans include general liability, including Insurance Canopy, which provides up to $2M in total annual coverage and up to $1M in coverage per claim with no out-of-pocket deductible.
Damage to Premises Rented
Damage to premises rented coverage is designed to protect your business from the cost of fire damages done to rented business spaces, like a venue or commercial kitchen. The amount of coverage varies by provider, and not all providers offer this coverage. At Insurance Canopy, we provide up to $300K in coverage for damage to premises rented.
Assault & Battery
Assault and battery insurance is particularly important for alcohol-serving businesses. This coverage can protect your business from the cost of bodily injury and property damage claims that arise from assault and battery events like fights or sexual assault. It can also cover claims that your business failed to prevent or end an assault and battery even when it should have done so.
Insurance Canopy provides the option to include this policy in your liability insurance plan with up to $25K in coverage.
A cyber liability policy can protect your business from the cost of first- and third-party claims that arise from a cyber security breach within your company. If you collect and store important business information—especially customer billing information—online, on a computer, or on a mobile or tablet device, you need cyber liability insurance.
The amount of coverage provided in a cyber liability policy varies by provider, but at Insurance Canopy, you can protect your business with up to $100K.
How Much Does Dram Shop Insurance Cost?
There are several factors that affect the cost of insurance, including the state your business operates in, the policies included in your plan, and the coverage limits provided by each policy.
At Insurance Canopy, the price for dram shop insurance starts as low as $399 and includes the following coverages:
- General Liability: up to $2M total coverage & $1M in coverage per claim
- Liquor Liability: up to $300K total coverage & $100K in coverage per claim
- Damage to Premises Rented: up to $300K total coverage
You can also choose to increase your limits for liquor liability up to $2M in total coverage and $1M in coverage per claim. Insurance Canopy also offers additional policy options for assault and battery insurance as well as cyber liability.
Protect Your Business with Insurance Canopy
Hopefully this article helped create a better understanding of dram shop insurance and why it’s a necessary step in starting an alcohol-serving business. We wish you the best of luck in your search for high-quality, low cost insurance coverage!
If you haven’t looked at Insurance Canopy’s dram shop insurance plan, we encourage you to check it out. With options for general and liquor liability insurance, damage to premises rented, assault and battery, and cyber liability, Insurance Canopy provided a comprehensive insurance plan to protect your business from the cost of claims.
You can get the coverage you need in ten minutes or less and access your insurance plan 24/7. So what are you waiting for? Protect your business with Insurance Canopy today!