Liquor Liability..You May Need It!

August 5, 2014

If you are a business that manufactures, serves, sells or distributes alcohol you need Liquor Liability Insurance.  Liquor Liability Insurance is recommended to protect your company from potential financial losses arising from litigation involving alcohol-related damages. Alcohol creates real and significant exposures for restaurants, bars, taverns, and hotels. These operations develop a large percent of revenue from sales of alcohol products.

Commercial general liability policies are not intended to cover liquor liability exposures. These policies do have what is called “host liquor”, which provides some protection for liquor liability as long as you are not in the business of serving, selling or distributing alcohol.  Serving alcohol at a company office party might fall into this category.

Host Liquor Liability Insurance:

Provides insurance protection for businesses against bodily injury or property damage claims brought by third parties injured as a result of an intoxicated guest who was served alcohol at an event you hosted–as long as you are not in the business of serving, manufacturing or selling alcohol.

Liquor Liability Insurance:

Provides Insurance for bodily injury or property damage for which you may become legally liable as a result of contributing to a person’s intoxication. Liquor Liability Insurance is provided under a separate policy and is intended to cover businesses that are in the business of manufacturing, selling, distributing or serving alcohol.

One very important feature about Liquor Liability Insurance is that it provides defense coverage. Defending your firm in these kinds of situations can be very costly and cases can run for months.

Actual Claim

To give you an idea of the magnitude of Liquor Liability claims we have provided this example:

  • A Restaurant was hosting a private event for company employees and guests. An underage guest presented a fake ID and was served alcohol. The minor became intoxicated, left the restaurant and was involved in a fatal accident.  The family of the deceased sued the restaurant for serving a minor.  The claim settled for $890,000.