Liquor Liability Coverage: How to Protect Your Business from Losses Related to Alcoholic Beverages

Business liability policy exclusions

A typical liability policy for a business excludes losses that involve:

• causing or contributing to the intoxication of any person,
• furnishing alcoholic beverages to a person under the legal drinking age,
• furnishing alcoholic beverages to a person already under the influence of alcohol,
• any statute, ordinance, or regulation related to the sale, gift, distribution or use of alcoholic beverages.

However, the exclusions only apply to businesses that make, distribute, sell, serve or furnish alcoholic beverages. This means that most companies are covered for their liquor liability exposures, such as holiday parties. Other companies may need to consider special protection, such as what is offered by a Liquor Liability policy. This type of insurance protects bars, restaurants, hotels, motels, package liquor stores or other places where liquor is sold, distributed, or served. It also protects liquor manufacturers as well as owners of property that houses liquor-related businesses.

It handles claims involving injury or damage caused by customers who were provided liquor by the covered business.

A liquor liability policy covers only injury or damages an insured has caused due to its serving or selling/furnishing alcoholic beverages. Therefore, a liquor liability policy supplements an operation's general liability protection.

Liquor liability policy

Liquor liability policies will protect a business from a variety of situations such as:

• A package liquor store is sued by parents of minors who jumped from a roof after drinking wine the store had sold them.
• A bar owner is sued by a person who was injured when an intoxicated patron emerged from the bar and fell on him.
• A restaurant is sued by a customer who is hurt during a fight between two intoxicated patrons.
• A bar owner is sued by the family of a woman killed by an intoxicated driver who purchased liquor from the bar.

However, the liquor policy also has several important limitations. For instance, it only responds to losses involving the insured business owner and employees (not their friends and relatives). Also, no coverage exists for intentional (deliberate) acts. Further, coverage does not apply to injury caused by the alcoholic beverage, such as food poisoning from contaminated beer. Businesses that have significant liquor exposure should be sure to contact an insurance professional and arrange for proper coverage. It's the sober thing to do.

Do you still have questions about the Liquor Liability Coverage for your business? Talk to an insurance professional at Williams Insurance about your needs and ensure you have proper protection.