Are you considering starting your own business? If you’re planning on opening a business that distributes or serves alcohol, you will likely want to invest in liquor liability insurance. This article will cover the basics of this insurance like, “What does liquor liability insurance cover?” and “Why is liquor liability important?”. Understanding how liquor liability insurance works and what it covers is crucial if you plan on selling alcohol in your business venture.

What is Liquor Liability Insurance?

In a nutshell, liquor liability insurance protects businesses that serve, sell, or manufacture alcohol. Liquor liability insurance will cover bodily injuries or property damage caused by a customer that is intoxicated after you sell or serve them alcohol. Many states, including Florida, require this type of insurance to cover medical bills, repair bills, legal costs, settlements, and judgements if your business is liable for an alcohol-related accident or problem.

What Does It Cover?

Now that you understand liquor liability insurance, it’s essential to know what it does and does not cover you as a business. Below are some of the most common claims this type of insurance policy can help you cover:

  • Drunk driving – If your business sold alcohol to someone who damages property or gets in a car accident that damages another driver, this policy could help cover those costs.
  • Property damage – For example, if a customer you served liquor to causes damage to another person’s belongings.
  • Assault and battery – This policy can help protect you if someone you served alcohol gets in a fight with another person and physically harms them.

Now that you understand what liquor liability insurance covers, it’s important to note what it doesn’t cover. This insurance policy will not cover damages to your business’ property – even if an intoxicated customer causes the damage. If you want to protect your business’ building, equipment, and inventory, you will need to invest in commercial property insurance.

According to Insureon, the average liquor liability insurance policy costs $2,060 for bars and $545 for restaurants. As with most insurance policies, your liquor policy cost will depend on several important elements:

  • Your state – What state your business is located in will affect the cost of your policy.
  • Liquor sales – The amount of alcohol your business makes annually will impact your insurance policy’s cost.
  • Coverage limit – If you want your policy to have a higher coverage amount, you will pay more for your insurance.
  • Claims history – If you have ever made claims on your liquor liability policy, this will affect your premium.
  • Industry – Depending on how “risky” your business is, your policy cost will be impacted by it. For example, a retail store that sometimes hosts wine tastings will pay less premiums than a bar serving alcohol.

Finally, it’s important to know that there is a difference between liquor liability and host liquor liability. Host liquor liability insurance is intended to protect businesses from claims of bodily injury or property damage arising from serving or distributing alcoholic beverages at a party not engaged in this activity as a business enterprise.

If you are interested in opening a business and plan on serving or distributing alcohol, you may want to speak to experienced insurance providers about what type of policy (or policies) are best for your business. At Dunham Insurance, no matter what type of insurance coverage you need, we take the extra time to ensure that you completely understand your coverage and that it fits your needs perfectly. Get in touch to discuss your specific insurance needs!