Liquor Liability-Who needs it?

July 7, 2015

Summertime is a carefree time of backyard parties, celebrating 4th of July and weddings! Can you guess from that list what coverage issue jumps to mind? Yes, Liquor Liability!

Who Needs Liquor Liability Insurance?

  • Businesses that sell or serve alcohol at their establishment need Liquor Liability Insurance. Some states require Liquor Liability Insurance for every establishment that sells and serves alcohol; others do not.
  • Businesses that have a BYOB setup which allows customers to consume alcohol on their premises may also be required to obtain Liquor Liability Insurance. If it is not required in your state, it is still a good idea to protect yourself or your business from this type of exposure.
  • Individuals hosting a special event; such as, a wedding (in this instance, you could obtain coverage for a specific event-Host Liquor Liability).

An insurance broker familiar with your state’s laws can help you determine your exact coverage needs.

What Does Liquor Liability Insurance Cover?

Liquor Liability Insurance protects business owners against the costs of liquor-related incidents. For example, if a drunken patron starts a fight, drives home, or falls over and injures himself or another patron, any affected party could sue your establishment for damages.  As was the recent case in Florida reported by the Insurance Journal when a South Florida jury awarded $24 million to a man whose pregnant wife was killed when a drunken driver slammed into a cabana at a Fort Lauderdale hotel. The decision came more than three years after a car crossed a sidewalk, jumped a curb and plowed into the poolside cabana at the Riverside Hotel. Jurors assigned 15 percent liability – or $3.6 million – to the hotel.

Similarly, Host Liquor Liability protects individuals against the costs of liquor-related incidents. For example, suppose you are celebrating a wedding: At the wedding reception, you serve alcohol to all of your guests of legal drinking age. If a guest became intoxicated and left the reception hitting a pedestrian in a crosswalk, you would most likely be sued for contributing to the intoxication of that guest. Since there is no charge for the alcohol, a Host Liquor Liability situation would exist.

A robust Liquor Liability insurance policy will protect you by…

  • Paying for the legal costs associated with defending yourself against the charges.
  • Paying for any settlement or judgments you are found liable for covering.

In the absence of adequate Liquor Liability Insurance; however, you’ll be on the hook for all those expenses. This can be overwhelming for restaurants and bars, especially because attorney’s fees alone can easily climb into the tens of thousands of dollars. For the individual, your special event can be expensive enough without adding on liability from a drunken accident.

What Protections Should My Liquor Liability Policy Include?

If people are drinking alcohol at your establishment, Liquor Liability Insurance is probably a good idea. But not all policies are created equal. Coverage offered might include any of the following…

  • Lawyers’ fees for defending your business against liquor-related lawsuits.
  • Damages for which you’re found liable in court.
  • Coverage for incidents that occur off your business premises (e.g., a car accident caused by a driver who became intoxicated at your establishment).
  • Coverage for bartenders who drink on the job.
  • Coverage for assault and battery, in case of fights that occur among patrons or between a patron and bouncer.
  • Coverage for mental damages, which some plaintiffs might seek following a traumatic incident of violence at a bar.
  • Coverage for specific incidents (e.g., sexual assault, stabbings, shootings, etc.).
  • Evaluating your risks with a knowledgeable insurance broker is critical. At The Armstrong Company Insurance Consultants our experienced licensed representatives can help you find the right coverages you need by evaluating your particular risks. Contact the Armstrong Company Insurance Consultants today at 866-990-9286.  We are here to work for you!

The Armstrong Company Insurance Consultants (License #0440075)