Any business that manufactures, sells, or serves alcoholic beverages faces unique risks in their operation. Legal claims from damages or injury related to alcohol consumption can lead to thousands or even millions of dollars in costs, potentially harming the business and its financial assets. To protect against these losses, liquor liability insurance is a smart risk management practice. U.S. Risk Underwriters, a leading specialty lines insurance broker, knows that liability insurance provides financial protection as well as peace of mind for alcohol-related businesses. In this guide, we’ll explore liquor liability insurance, its major types, and the typical coverages it can provide.
What is Liquor Liability Insurance?
Most businesses carry some form of commercial general liability (CGL) insurance. This insurance provides coverage against a broad number of risks. Unfortunately, liabilities arising from the sale, manufacture, or serving of alcohol and alcoholic beverages is typically excluded from nearly every CGL policy, with very few exceptions.
What can a business do to protect its assets? The solution is liquor liability insurance, a specialized form of liability policy. This is a recommended coverage for many different types of businesses, and may be required by landlords, property management contracts, and local or state laws. Some of the many businesses that can benefit from such insurance include:
- Entertainment venues where alcohol is served
- Liquor stores
- Breweries and Wineries
- Grocery stores/Drug stores selling alcoholic beverages
- Catering operations
Businesses that periodically serve alcoholic drinks as part of business-related events or parties may also benefit from the extra protection liquor liability insurance provides.
What Coverage Does Liquor Liability Insurance Provide?
Specialized liquor liability insurance is designed to protect business owners and entities from the costs associated with alcohol-related incidents that may lead to property damage, injury, or even death. Imagine that your company owns a restaurant/tavern, and a drunk patron were to become injured driving home or starting a fight with other patrons of the establishment. Any affected party – other patrons, property owners, motorists – could conceivably file a lawsuit against your establishment for damages. It goes without saying that a lawsuit could be financially devastating.
Liquor Liability policies provide coverage for:
- Legal costs associated with lawsuit defenses and criminal charge defenses.
- The expenses associated with judgements or settlements.
- Medical expenses associated with alcohol-related claims.
- Third-party Property damage resulting from alcohol-related incidents/accidents.
It is important to understand what a liquor liability policy does NOT cover – other CGL or specialty insurance policies may be needed to protect against certain other risks and exposures like:
- Injury, death, or property damage resulting from underage patrons who are drinking.
- Property damage to your own premises.
- Claims associated with alcohol use/sale/manufacture that are not property damage- or injury-related.
U.S. Risk Underwriters and its network of insurance brokers can help businesses protect their financial interests with liquor liability insurance. Without this critical form of insurance, an alcohol-related incident can spell financial disaster for companies that serve, sell, or manufacture alcoholic products.
About U.S. Risk
U.S. Risk Insurance Group, Inc. is a wholesale broker and specialty lines underwriting manager providing a wide range of specialty insurance products and services. Headquartered in Dallas, Texas and operating 16 domestic and international branches, U.S. Risk and its affiliates would like to help you access a world of new markets and products. For more information, contact us today at (800) 232-5830.