Any business that manufactures, serves, sells, or facilitates the purchase or use of alcohol opens itself up to the occupational hazard of someone getting inebriated to the point where damages or injuries result. While it makes sense that the intoxicated patron should be at fault, the fact of the matter is establishments that serve alcohol can be held liable for injuries and damages that occur from their patrons’ intoxicated conduct.
Claims made as a result of injuries or damages caused by inebriated persons can be steep. For this reason, liquor liability insurance is recommended to protect such establishments from potential financial losses arising from litigation involving alcohol-related damages. To this end, many states now require businesses who sell alcohol to carry liquor liability coverage.
Liquor liability insurance is typically sold as a standalone liability policy or as a rider add-on to a commercial liability policy. It’s important to note, that your standard liability policy provides limited coverage for alcohol-related liability claims. A liquor liability policy will not cover sales that are sold to minors or otherwise illegal.
Liquor Liability Insurance Coverage
- Assault and Battery Coverage. As you might expect, the lion’s share of alcohol-related claims filed against restaurants, bars, taverns, and hotels are the result of fights or altercations. Therefore, make sure that your liquor liability policy includes assault and battery coverage.
- Litigation Defense Costs. Liquor liability coverage typically includes the cost of retaining a lawyer as part of the policy’s defense costs coverage. Make sure your policy includes this coverage, and that the coverage limits are generous.
- Employee Coverage. Your liquor liability insurance will cover injuries to patrons or others for which you are found liable. It is a good idea to make sure your employees are covered as additional insured’s as well.
- Mental damages. Another key coverage of liquor liability insurance is mental damages. Because injured patients often seek damages for stress, psychological, or mental damages, be sure that your insurance policy covers this type of claim.
In addition to purchasing liquor liability insurance, businesses should take proactive measures to limit their exposure to alcohol-related claims. These include training employees to refuse serving alcohol to intoxicated patrons, requiring employees to follow careful measuring when mixing a drink, and refusing to serve alcohol to patrons known to be abusive or violent.