
Selling liquor at your premises can increase the amount of liability your business is exposed to. Due to the increase in risk, your business’s general liability policy often excludes liability that is alcohol-related. You need to get liquor liability insurance to protect your business against drunk customers and the damage they may cause.
A liquor liability policy is often mandatory for businesses manufacturing, selling, or storing alcohol. Some of the businesses that have to get this policy include:
- Bars
- Nightclubs
- Restaurants selling any alcohol type
- Breweries
- Liquor stores
- Grocery stores selling liquors
- Wineries
- Hotels
- Event facilities
Getting a liquor liability policy is a prerequisite for getting a commercial lease or liquor license. Some partners or business associates might insist on getting liquor liability for your business to offset risks from drunk clients.
Here are some reasons why liquor liability insurance is beneficial for your business:
Covers Assault or Battery
Drunk customers often act irrationally, so they can engage in fights and physical altercations. When the fight happens on your premises, your business may be liable when someone sues you. Your liquor liability policy covers your business in such a case, preventing you from the consequences of your client’s actions. Don’t let someone else’s personality harm your business.
Handles Sexual Harassment Claims
Clients or anyone on your premises can sue your business if a drunk customer sexually harasses them. Sexual harassment claims can cause your business to face penalties like stop-work orders or revoking the license. These claims might affect your brand reputation, creating negative customer expectations.
Your liquor liability policy protects your business under such cases and helps you get representation for the court case. By getting the charges dropped or overseeing settlement negotiations, your insurer will help you keep your reputation intact.
Covers Property Damage
Intoxication can cause revelers on your business premises to damage other people’s property and businesses. You are responsible for property damage by your customers, so your business may get sued. Liquor liability coverage takes care of any repair costs for the damage. Your insurer will cover replacement costs and handle any expenses resulting from loss of business due to the injury.
Covers Bodily Injury
Drunk people may injure themselves. Some customers might sue your business for bodily injuries if they happened within your premises. Your liquor liability insurance will help protect you against such liability. They can take care of medical costs and legal fees, including settlements.
Covers Liability from Drunk Driving
Drunk driving endangers the lives of other road users, so such drivers can cause injuries or damage. Selling more alcohol to drunk customers can expose you to liability. If a customer drinks at your premise, then proceeds to drive a car after which they cause an accident, your business will be liable. Liquor liability covers your business in case of a lawsuit, preventing financial loss.
What Liquor Liability Does Not Cover
While liquor liability policy covers most misdemeanors and actions involving drunk customers, they do not cover all. Instances which your liquor liability policy does not cover include:
- Underage Drinking: Selling alcohol to minors is an offense, so your bartenders should only serve alcohol to adults. If they sell alcohol to underage customers, your policy will not protect your business against any claims that may result.
- Libel or Slander: Defamatory statements made by drunk customers may cause damage to your business. Your liquor liability policy will not cover damages or claims involving such statements.
- Illnesses Resulting From Alcohol Consumption: Alcohol and alcoholic drinks can sometimes cause clients or manufacturers to get sick. While your business may be liable for such diseases, the liquor liability policy will not cover related claims. You need product liability insurance cover for such claims.
- Commercial Property Damage: Damage to other businesses is covered under the liquor liability policy, but yours is not. You should take out commercial property insurance or business interruption insurance to cover any damage to your business.
Get Adequate Liquor Liability Insurance
Your business is exposed to multiple risks if you sell, store, or manufacture alcohol within your premises. Getting liquor liability insurance protects your business against claims that can cause financial loss. Your policy will cover legal fees, court levies, and settlement amounts, preventing such claims from hurting your capital base. Get liquor liability insurance to protect your business today.