What Does Liquor Liability Insurance Cover?
June 19, 2023

What Does Liquor Liability Insurance Cover?

If your business sells or serves alcohol as part of its operations, you must account for many related risks and exposures. Alcohol can be a fun addition to many events or celebrations, but it may also make guests, clients and customers behave unpredictably and even dangerously. Providing alcoholic beverages can create significant risk levels for your company, as you could be held legally responsible for the actions of intoxicated parties. Any organization dealing with alcohol must have liquor liability insurance.  

What Is Liquor Liability Insurance? 

As its name suggests, liquor liability insurance can provide financial security for your business for alcohol-related incidents. Whether you own a bar, operate a restaurant, run a grocery store or otherwise distribute alcohol, this coverage should be considered an essential component of your insurance portfolio. Without an adequate policy, an intoxicated person could cause significant financial losses or property damage, and your business could face high out-of-pocket costs. 

How Does Liquor Liability Insurance Differ From Host Liquor Liability? 

Host liquor liability insurance is similar to liquor liability coverage, but they are not the same. Host liquor liability may cover a business that puts on an annual social event where alcohol is served on the premises. This coverage is often included in a business’s general liability policy. Host liquor liability applies only to businesses that do not make, serve or sell alcohol as part of their operations. 

If your business earns money from making, selling or serving alcohol, discuss liquor liability insurance with your licensed agent as you may need coverage beyond a general liability policy. a glass of wine sitting on top of a wooden table

What Does Liquor Liability Insurance Cover? 

Your liquor liability insurance policy can cast a wide safety net across alcohol-related incidents. Although the details of your coverage may vary, liquor liability policies can provide financial assistance for the following: 

  • Third-party bodily injuriesIf an intoxicated party injures someone else, such as a fellow guest or customer, this coverage can help pay for resulting medical expenses. 

  • Third-party property damageYour insurance may insulate you from financial losses if you provided alcohol to someone who damaged another party’s property. 

  • Legal costsIf your business is sued for an intoxicated customer incident, liquor liability insurance may help pay for your legal representation, settlements and judgments. 

When addressing your liquor liability insurance needs, your business should consider additional exposures requiring enhanced coverage. For example, bars or nightclubs that employ bouncers may require additional coverage if a customer alleges they were injured in an altercation. 

How Much Does Liquor Liability Insurance Cost? 

Like many types of insurance, the cost of adequate liquor liability coverage may vary depending on your business’s unique circumstances. When assessing your risk levels and composing appropriate policies, insurance companies may consider the following factors: 

  • Location 

  • Industry 

  • Sales numbers 

  • Prior claims history 

  • Policy details (e.g., coverage limits) 

How to Get Liquor Liability Insurance 

We’re here to help. The Svendsen Insurance Agency has over 75 years of experience helping individuals, families and businesses protect their finances with reliable coverage. Visit our website or call 203-397-3993 to get started today.  

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information. 


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