Common Risks that Require Liquor Liability Coverage
Any establishment that sells, serves, or assists in the purchase or use of liquor (i.e. dram shop), which includes restaurants, bars, nightclubs, and taverns, is at risk for a liability claim as a consequence of patrons drinking to the extent that injuries or property damages are the result of their actions.
While one may assume that, since the inebriated person was at fault, they should be the one to pay, the reality is that the business that served the alcohol will likely be found liable for any injuries or damages that occurred as a result of the actions, behaviors, or conduct of a patron who drank too much. This is why liquor liability coverage is essential for any one who sells alcohol for consumption.
Common alcohol-fueled scenarios
It can be quite costly when a liability claim is levied upon a restaurant or bar as a result of damages or injuries caused by an intoxicated customer or patron. For example, if an intoxicated patron leaves a bar, gets into his or her car, drives, and commits a vehicular act of manslaughter, an alcohol-related claim is likely to occur. The families of any victims will most likely sue the bar for both civil and criminal damages.
Another common example, a restaurant catering an event serves alcohol, and guests subsequently become involved in a fight, and serious injuries are incurred. This is the type of situation where a business that sells or serves alcohol may be held liable for the actions of those inebriated persons being served. Liquor liability insurance will help cover the owner’s legal costs, court fees, and any civil or criminal damages awarded.
What liquor liability insurance covers
While the terms surrounding this policy vary, some commonalities ensue: Most states in the US require establishments that sell alcohol to carry liability insurance. Policies exclude the selling of alcohol illegally (for example, selling liquor to a minor), and most liquor liability policies are sold as a standalone policy or packaged with a general liability policy.
A good deal of alcohol-related liability claims filed against bars, taverns, and restaurants are a result of liquor-induced fights or altercations, most commonly resulting in an assault and battery allegation. Therefore, assault and battery coverage should be included in your policy. It’s vital that if your establishment serves alcohol, you protect yourself from potential financial losses by being covered with liquor liability coverage.