If you have a business manufacturing, selling, or serving alcohol, then you need to obtain
liquor liability insurance as most general liability policies will not cover the exposures you face.
Liquor liability protects your business against damage or destruction claimed as a result of a customer of your business becoming inebriated and hurting themselves or others. Liquor liability coverage may be sold as an add-on to a commercial liability policy or as a separate liability policy.
The premium on this type of policy can be expensive. It is estimated that only about a third of businesses that should have this coverage actually have it, in part because of misconceptions that exist in the hospitality industry with regards to the industry's liability risks for drunken patrons.
Important factors to discuss with your agent when considering the purchase of a liquor liability policy:
- Assault and Battery Coverage – Most claims against bars and eating places are the results of physical fights. Find a policy that includes coverage for assault and battery claims.
- Defense Costs – Many times it’s not the actual cost of the claim that is damaging, but the legal costs involved in defending the claim. Some policies will deduct the defense costs from the total limit provided by the policy. Find a policy that pays for defense costs in addition to the policy limit. If one is unavailable, then consider the legal costs when figuring out what your limit amount should be.
- Employees Included – It is common for employees to drink despite the rules. Insurers know this and sometimes exclude employees from coverage. Be sure that employees are covered as patrons.
Keep in mind that liquor liability insurance will not provide coverage for claims when liquor is supplied in contradiction to what the law permits.
Contact us at
(877) 807-1509 for a free
Texas business insurance quote or visit our office.