Liquor Liablility Insurance: Do All Business Owners Need It?

If you own a restaurant, bar, or nightclub you most likely serve alcoholic beverages. If you own a business and you invite clients to an open house on your premises and serve alcohol; an intoxicated customer can cause damage or gets injured on your premise after being served alcohol, you can be held liable. To protect your business from a large financial loss you can purchase a liquor liability insurance policy.

THERE ARE TWO TYPES OF LIQUOR LIABILITY YOU SHOULD LOOK INTO IF YOU OWN ANY TYPE OF BUSINESS.

Liquor Liability – for those in the business of selling alcohol

Host Liquor Liability – for those not in the alcohol business but who host a party or event where alcohol may be served or provided for free.

Liquor Liability
A form of insurance that covers your business for personal injuries and property damage for after allowing a person to become intoxicated on the premises. These damages can be the results from fights, careless behavior or even auto accidents.

Liquor legal liability is a separate form of insurance, and it only covers parties in the business of selling, distributing, manufacturing or serving alcoholic drinks for free or for profit where a license is required. Your general liability policy will not cover this.

Host Liquor Liability
Host liquor liability is not excluded under a personal liability or a commercial general liability policy. Both of these policies protect you when you host a party and other events where alcohol is being served and not sold by you.

Personally Hosted Parties – Personal liability is coverage on your homeowners, condo, or renters insurance policy.  The limit can vary from $50,000 up to $500,000. If liability limit is a concern you should think about a personal excess liability (umbrella) policy for $1,000,000 limit.

Business or Office Parties – Your business would be insured under your general liability policy. Coverage is not excluded for a party you host. Your liability limit can range from $100,000 to $1,000,000. To increase your limits give us a call.

Special Event Liability – If you are hosting a party and you don’t have personal or commercial liability coverage, you can purchase a separate policy for the length of the event. Premiums range from $150 to $750 or more for the type of event you are hosting. Contact us for more information.

Here are some tips that are helpful for reducing the likelihood of liquor liability lawsuits:

- Serve drinks instead of offering an open bar.
- Hire a vendor who is licensed and insured to serve beverages. Get a copy of the individual's certificate of insurance naming your business as an additional          insured for that specific event.
- Stop serving drinks early in the evening.
- Provide food for attendees to eat, to slow the effects of the alcohol.
- Implement a policy for intoxicated guests, but be sure to handle difficult people in a respectful manner.
- Provide non-alcoholic drinks at no charge.
- Price the alcohol at a slightly higher rate. Guests will be less likely to drink more if the alcohol is not cheap.
- Schedule the event during day hours. This discourages heavy drinking. 

It can be difficult to determine which type of liability coverage is needed for a particular case; business owners should discuss their options with an agent. Give Frimark/Keller & Associates a call to discuss what kind of coverage you need.

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