Common Liquor Liability Insurance Questions And Answers

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As a business that sells or serves alcohol, you need liquor liability insurance.

Did you know your business could be required to pay for accidents or damages caused by your patrons? It’s true. Depending on your state’s local dram shop laws, you could be sued for hundreds of thousands of dollars if someone you served alcohol to causes either an accident, property damage, injury, or death.

As leaders in the insurance industry, we know that insurance can be confusing. That’s why we’re answering some of the most common questions that business owners like you have about liquor liability.

If at the end of this article you still have questions, don’t worry. You can always learn more by checking out our program options.

Learn more about Liquor Liability Insurance


Liquor liability insurance is a type of insurance policy designed to protect alcohol-serving businesses from the hefty out-of-pocket costs of third-party liquor liability claims. These claims arise when, in accordance with local dram shop laws, your business is sued for accidents, injuries, and other damages caused by individuals you served alcohol to.

Liquor lawsuits can be very expensive, often costing upwards of $1 million dollars in cases involving death. Even if your business is not held liable to pay for the actions of your patrons, the price of legal defense can be crippling. Liquor liability insurance can cover many, if not all, of the costs associated with liquor liability claims, allowing you to continue operating your business with peace of mind.


Dram shop laws are state-regulated liquor laws that impose potential liability upon businesses that serve or furnish alcohol for accidents and damages caused by their patrons. Because they vary by state, not all dram shop laws are created equal. In fact, some states don’t even have them. Check out this helpful video to learn more:

[“What Are Dram Shop Laws?” video]

It’s important to know what your local dram shop laws are so you can manage the risk your business faces. Of course, even if your state doesn’t have dram shop laws, it’s still smart to purchase insurance. After all, accidents do happen, and it’s never a bad idea to be covered.


Simply put, if your business sells or serves alcohol, you need insurance for liquor liability. Insurance Canopy has helped myriad businesses protect themselves over the years. Here are some of the most common businesses we have seen:

  • Bartenders
  • Caterers who serve alcoholic beverages
  • Concessionaires
  • Food Trucks
  • Food Vendors
  • Private Chefs

If you have any questions as to whether or not your business qualifies for Insurance Canopy’s liquor liability insurance, feel free to contact one of our licensed insurance agents.


Similar to dram shop laws, the cost of liquor liability insurance varies by state. For instance, in California, you can get a liability policy that includes both liquor and general liability insurance for as low as $524 a year, while in New York that same policy could cost $674.

No matter where your business is located, you should expect to pay anywhere between $400 and $800 on average. If you’d like an accurate insurance quote according to your state, you can easily do so here.

So how much coverage do you get for the price you pay? At Insurance Canopy, you can get as much as $2 million in coverage for general liability as well as $300K in liquor liability coverage. Insurance Canopy also provides additional policy options that you can add to your policy at extra cost, like assault & battery coverage or cyber liability insurance.


Hopefully this article has helped you clear up some questions you might have had about liquor liability insurance. If you haven’t done so yet, you should take a look at Insurance Canopy. With both general and liquor liability, it covers the majority of risks that your business may face, and not just risks involving alcohol.

You can get started in just 10 minutes or less and create a financial safety net to protect your business for years to come.

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