Establishments that sell alcohol are exposed to a unique level of risk since they deal with intoxicated customers. Liquor liability is a type of bar insurance coverage meant to protect businesses from liability due to actions of drunk customers. Getting liquor liability insurance is a requirement under many state laws if your company sells, manufactures, or stores alcohol.
Businesses that need to get liquor liability include:
- Restaurants (if they sell alcohol)
- Night clubs
- Event facilities with alcohol like concerts
- Grocery and liquor stores
Here’s what you should know about liquor liability insurance:
Covers Third-Party Property Damage
Drunk patrons at your establishment can damage nearby property, causing your business to be liable. Third-party property damage, like on other businesses or rental property, can result in financial claims for which your business can be responsible. Your liquor liability cover protects your business, preventing financial loss from such claims.
Liquor liability coverage handles any repair and replacement costs for third-party property damage. The insurer caters to expenses due to loss of business from the property damage. They handle charges related to the property damage case if it ends up in court. These costs include representation fees, settlement, and court levies.
Covers Third-Party Bodily Injury
Drunk people pose a risk to themselves and others due to their irrational acts. Intoxicated customers can injure themselves or other customers, and your business is liable for third-party injuries within your premises.
Liquor liability coverage will handle medical and rehabilitation costs for third-party injuries. To protect your business, the insurer also takes care of representative fees, court charges, and settlement amounts. This prevents your business from suffering a financial loss in such a case.
Covers Assault, Battery, and Sexual Harassment Claims
Intoxicated patrons can act irrationally, causing bar fights or harassing other customers sexually. While you cannot control each client’s actions, your business is liable for any fights within the premises.
Customers who face assault, battery, or sexual harassment can file claims against your establishment. Such claims can affect your brand’s reputation, which affects the customer experience. In extreme cases involving sexual harassment claims, your business may face closure from revoked licenses and stop-work orders.
Claims can be expensive, so your liquor liability coverage protects your business from financial commitments. Your insurer gets you representation for any cases resulting from assault, battery, and sexual harassment claims in your establishment.
Covers Drunk Driving Accidents
Your business can be liable if one of your patrons drives while intoxicated. Drunk driving impairs an operator’s judgment and reaction, making them more likely to cause accidents. Any injuries or property damage from such an accident can hurt your business financially.
Liquor liability insurance protects your business from such claims. The insurer will handle any accident-related costs and help you out in court.
What Your Liquor Liability Policy Does Not Cover
Liquor liability insurance covers many claims involving drunk customers but does not cover all. Some cases your liquor liability policy will not cover include:
- Libel and slander: Drunk clients can make defamatory statements that damage businesses, but your liquor liability insurance does not cover such cases.
- Sicknesses resulting from alcohol consumption: Patrons and revelers can sometimes fall sick from consuming alcoholic drinks. Such instances often result from manufacturer errors or poor storage for which your insurer does not offer coverage.
- Underage drinking: Your insurer will not protect your business in cases involving intoxicated minors. Selling alcohol to underage persons is an offense for which your business must bear full responsibility.
Find Adequate Bar Insurance
Selling alcohol can expose your business to numerous risks since intoxicated customers often act irrationally. Actions of drunk customers can expose your premise to financial loss, so you need liquor liability insurance to protect your business. Getting adequate bar insurance coverage allows you to continue with business uninterrupted without claims hurting your finances.