When it comes to bars, restaurants, and taverns, most patrons expect they'll be able to enjoy a variety of beverages, regardless of the type of establishment. Even casual diners may serve small bottles of wine or beer as a way to supplement their normal milkshakes and sodas. So if it's such a common thing to do, many owners believe it should be easy to get the insurance they need to keep their businesses safe from any potential liability of serving alcohol. However, this is not always the case. Learn more about what it means to get the essentials for your business, so you always stay protected.

This article focuses on liquor liability as it relates to neighborhood tavern insurance, bar insurance or restaurant insurance, but liquor liability is an additional protection. The establishment is going to need commercial general liability insurance at the very least and can have other forms of protection as well such as -
- liquor liability - that's discussed here
- commercial auto insurance if there is a delivery service
- property insurance - assets, equipment, inventory.
- workers comp (depends on state - if there is a state fund, then this coverage is provided by the state)
- commercial umbrella (for umbrella protection - which helps cover over and above what general liability does not pay out in a claim)

The Perils of Alcohol

There are a number of people who are able to enjoy drinks safely and casually. They may come in, have a few drinks with their meal, and then leave without showing any signs of intoxication because they are, in fact, not at all intoxicated. But there is another, more dangerous side to the story, and bars, restaurants, and taverns have responsibilities to their customers that cannot be ignored. For example, if a person comes in, has three or more drinks and then leaves, the bartender of the establishment may be responsible for whatever the person does next.

This can be extremely tricky for those in charge because every customer will process alcohol in their own way. Some may become silly, some may become violent, or some may show very few signs of being affected at all. If a person leaves a bar and then kills five people in their vehicle, it may be difficult for a bartender to argue that they seemed perfectly fine at the time they left the bar — even if that happens to be true. In the most extreme scenarios, the owner of the establishment may be partially responsible for the five deaths that occurred after the person left their place.

Additional Considerations for Your Bar or Neighborhood Tavern

Liquor Liability Insurance is a way to keep from having to shoulder all of the costs associated with accidents that may come as a result of serving alcohol. If two of your patrons end up in a fight that damages your lighting fixtures and windows, then you don't have to pay for all of the repairs and the replacements from the company's profits. If a victim of a drunk driver (or their family) sues your bar for a million in emotional and physical damages, you won't have to pay for the lawyer or fight the charges yourself.

If you choose to settle with someone in the case of a mistake or gross neglect, you may be able to use insurance as a way to help you cover these costs as well. All business owners open themselves up to risk, and it's important to understand those risks before rather than after an incident has occurred. The better insurance you have, the less likely you are to end up in the middle of a dispute that you can't work your way out of.

To avoid having to spend additional money on the damages that can stem from drinking, it's time to understand more about your insurance policy. Most Bars, Restaurants and Taverns Liquor Liability Insurance have limits that can are often exceeded far faster than an owner could have ever anticipated. For a smarter, safer strategy, try thinking of the worst-case scenario, and then working out what you would do if it happened to you. This can often help you prepare for the worst, even if you don't choose the highest level of coverage.

For more insights into comprehensive protection, see Understanding Liquor Liability Insurance for Bars and Restaurants and Essential Insurance for Bar, Tavern, Restaurant, and Nightclub Owners.

Frequently Asked Questions

What does liquor liability insurance typically cover?

It generally covers legal fees, settlements, or damages related to alcohol-related incidents, such as fights or accidents involving intoxicated patrons.

Is liquor liability insurance legally required?

Requirements vary by state and local jurisdiction. Some areas require it for establishments with liquor licenses, while others do not.

Who should consider this type of coverage?

Bar owners, restaurant operators, tavern managers, and even event vendors who serve alcohol should consider this insurance to address alcohol-related liability exposures.

Does general liability insurance cover alcohol-related incidents?

Not typically. Most general liability policies exclude claims related to liquor, which is why a separate liquor liability policy is often necessary.

How are premiums determined for liquor liability insurance?

Costs depend on factors like alcohol sales volume, type of establishment, hours of operation, past claims, and local laws.

Still have questions? Talk to a local insurance expert.