Restaurant and bar owners are aware of the risks associated with operating their business. Serving one extra drink to the wrong customer can cause serious problems. That is why dram shop liability coverage is important. Here is a guide to researching liquor liability insurance coverage.
Dram Shop Liability Coverage
The origins of dram shop come from bars, taverns, and pubs where alcohol was served in small quantities. Many insurance companies also refer to dram shop as liquor liability coverage. There are several state laws that outline legal liability guidelines for places that serve alcohol. Businesses have to adhere to the liquor liability requirement.
What Does Liquor Liability Insurance Cover?
Liquor Liability insurance covers any bodily injury claims that may arise due to a drunk person hurting someone. The coverage also protects your business if a patron damages someone else’s property or gets into a serious auto accident. You can adjust your coverage based on the unique risks of the business.
Do I Need Liquor Liability Insurance?
If you make or sell alcohol as part of your business, you should purchase liquor liability insurance coverage. Liquor liability insurance is important if you are operating in a state with dram shop liability requirements. Over 20 states have a liquor liability requirement to help businesses avoid a potential disaster in the future.
What About General Liability Insurance?
Liquor liability insurance is not included in a general liability policy. General liability coverage protects your business against allegations of damage or injury. Host liquor coverage is included in the policy. If your business doesn’t serve alcohol, but people are still allowed to drink on the property, you are liable if someone gets hurt or causes damage while they are intoxicated.
Key Differences Between Host Liquor and Liquor Liability Coverage
Liquor liability coverage helps cover you against potential claims if you serve alcohol. You have the option to add this as an endorsement to your general liability coverage. Host liquor liability coverage protects businesses that do not sell alcohol but still allow drinking on the premises. This coverage is included in general liability policies. If you don’t serve alcohol regularly, but you still have special events throughout the year where alcohol is consumed, you should consider purchasing liquor liability insurance.
Other Things to Consider
The type of liquor liability policy you need may vary based on several factors. Think about the type of industry that you work in. If you operate your business in a high-risk industry, you will need greater coverage. You should also look at the location of your business and the amount of liquor sales your business makes yearly. Remember that the more coverage you need, the higher your premium will be.
Consult with RMS Insurance
While researching liquor liability insurance coverage, remember that each state has its own laws, provisions, and limits of liability to consider. Having the right coverage will protect your assets if you are involved in a lawsuit or extensive claim. If you have any questions about liquor liability coverage, our experts at RMS Insurance Brokerage, LLC will assist you.