Most business enterprises find that a majority of their exposure to legal claims are covered by their general business liability insurance policy. However, business owners sometimes forget their potential liability for losses due to alcoholic beverages. A general business liability policy typically excludes losses that involve:
- Furnishing alcoholic drinks to an individual under the legal age.
- Contributing to or causing the intoxication of an individual.
- Furnishing alcoholic drinks to someone already intoxicated.
- Any ordinance, statute or regulation regarding the gift, sale, use or distribution of alcoholic beverages.
However, the above exclusions apply to establishments that sell, distribute, make, furnish or serve alcoholic drinks. This means that many businesses will be covered for liquor liability by their standard insurance policy. Other establishments need to consider additional protection such as liquor liability insurance. Liquor liability insurance protects restaurants, bars, motels, hotels, package stores and other businesses that serve, sell or distribute alcohol. In addition, liquor liability insurance covers liquor manufacturers. This coverage can be extended to the property owners where the establishments are located. Liquor liability insurance covers claims and lawsuits that involve harm and damage caused by customers who were served alcohol by the policy holder.
A liquor liability insurance policy will pay only for the harm or damage a policy holder has caused through selling, serving or furnishing alcoholic beverages. Therefore, a liquor liability insurance policy enhances the establishment’s general liability protection.
Liquor liability insurance protects an establishment from situations such as:
- A bar owner who faces a lawsuit by a person who was harmed in some way by an inebriated individual emerging from the bar.
- A liquor store that must pay a settlement to parents of minors who fell off the roof after drinking alcohol purchased at the store.
- Accident caused by a patron who is over served.
However, a liquor liability insurance policy has some key limitations. For example, it covers only losses that involve the insured policyholder and employees. Relatives or friends are not covered. In addition, deliberate or intentional acts are not covered. Furthermore, liquor liability insurance will not cover harm caused by the alcoholic beverage itself, such as food poisoning. Establishments with significant exposure to liquor liability lawsuits should consider a liquor liability insurance policy.
Liquor liability policies have some differences. However, they all have certain terms that are common such as:
- Most states in the United State have legal mandates that require businesses that sell or serve alcohol to carry liquor liability insurance.
- Most liquor liability insurance will not cover incidents involving the illegal sale of alcohol.
- Most liquor liability insurance policies come either as a stand alone contract or combined with general business liability.
Learn more about your Liquor Liability Insurance Coverage options.
Call now to speak with one of the friendly agents in our San Francisco office, at 415-242-8777.
We will review your current coverage free of charge, discuss your current risks and search for the best insurance products to fit your business.