Understanding Liquor Liability Coverage and Why You Need It

There are many businesses out there that expect that their commercial general liability insurance policy is all that they need because it includes liquor liability coverage. The problem with that is this important coverage is not a part of policies for certain businesses. If you make, sell, or distribute alcoholic beverages, your policy contains an exclusion that effectively takes liquor liability coverage off the table. If you want this coverage, you’ll need to obtain a special policy.

  • What Liquor Liability Covers– The purpose of liquor liability coverage is to protect you, your employees, and your business from a financial setback related to liquor sales. It is important to have this coverage in situations where someone becomes injured or killed because of an intoxicated person that you served.
  • What Liquor Liability Doesn’t Cover– Generally speaking, most policies will not cover you if someone you serve is hospitalized or dies because of over-consumption (alcohol poisoning) or a contaminated beverage, such as a microbrew you crafted improperly. Deliberate acts are also not covered, and some policies also exclude alcohol-fueled assault and battery, such as a bar fight.

While liquor liability coverage is not inexpensive, when you consider a lawsuit can easily top $1 million between legal fees and judgements, it is smart coverage to have. Since lawsuits of this nature generally name both the business and the owner personally, it doesn’t matter what type of entity you have set up for your business. You won’t be able to duck the suit by structuring your business to keep your personal assets safe. Liquor liability covers both you and your business, as well as your employees.

If you would like to know more about liquor liability coverage or other business insurance coverages, give us a call at First Security Insurance. We have been providing peace of mind to businesses and business owners for nearly 100 years and we are confident we can do the same for you.