If you own a restaurant, bar, catering company, or concession stand that serves alcohol, you need liquor liability insurance. Without it, you could be held liable for alcohol-related incidents or liquor-related claims.
There are three main reasons to carry liquor liability insurance:
- Protection from financial loss
- "Dram shop" laws require coverage
- Untrained or careless employees
Protect Your Finances with Liquor Liability Insurance
The average cost to defend yourself against a liquor liability lawsuit is approximately $150,000. You could incur these costs even if the lawsuit has no basis. If, however, your lawsuit is found to have merit, the average cost of a settlement is approximately $500,000 and damages could reach millions of dollars.
Liquor liability insurance typically covers the legal fees, settlements, and medical costs your business may face, up to the limits of your policy and may even cover the costs of expenses if your business were to be responsible for damages stemming from a lawsuit.
Having Liquor Liability Insurance Meets State Dram Shop Requirements
Right now, nearly 43 states have some form of a dram shop law. "Dram shop" laws hold a business or host who serves or sells alcoholic drinks to a drinker who is obviously intoxicated, strictly liable to anyone injured by the intoxicated person. Some states require businesses who sell, serve, or produce alcohol to carry liquor liability insurance.
Even if your state does not have dram shop laws, you could still be held liable for your service of alcohol to an intoxicated patron. It's risky business to not carry coverage for liquor liability.
Liquor Liability Insurance Covers Employee Errors
No matter how extensive your employee training program is, mistakes still happen and you could be held responsible for your employee's actions. If an employee serves alcohol to an inebriated client, and that client causes damage or injures another person, your business could be hit with expensive lawsuits and other financial losses.
To reduce the likelihood of employee errors, implement the following protocols:
- An extensive employee training program and follow-up refresher sessions on your state's liquor laws
- Create an official protocol for inebriated guests including denying service, asking for a designated driver, or having a cab service on call to your establishment
- Scan all ID's to avoid underage liquor sales
- Pull receipts and documentation immediately if there's been an accident, physical altercation, or another alcohol-related incident. This will help you if you do wind up in court
Purchase Liquor Liability Insurance
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*All insurance policies have conditions, limitations and exclusions. Please refer to the policy for exact coverages.