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A prerequisite for obtaining a liquor license in most states is getting liquor liability insurance coverage. This insurance policy protects bar owners from lawsuits related to the sale or service of alcohol. Understanding the factors that affect the type and comprehensiveness of the insurance policy will help bar owners select the right coverage for their establishment. Here are a few factors to evaluate when choosing liquor liability insurance for your bar:
Coverage Limits
Liquor liability insurance requires bar owners to assess the potential risks to the establishment. These risks help determine the policies they need to cover any potential liabilities sufficiently. Possible risks include bodily harm, property damage, legal expenses, and other related claims such as assault and battery. If a client sues your bar due to physical harm or property damage resulting from an altercation with an intoxicated individual from your bar, you may be held liable. Liquor liability insurance would cover any medical bills, property damage, and legal expenses, including attorney fees and any corresponding settlements.
Insurance coverage limits may also be affected by other factors, such as size, location, and the variety of alcohol served. Depending on these factors, you may have to choose a larger or smaller amount of coverage. A large establishment in a densely populated area serving various types of alcohol would need a larger coverage area than a small establishment in a less populated area.
Policy Exclusion
Although a liquor liability policy protects against many potential risks, it has some policy exclusions that may require additional coverage. The policy exclusions include coverage against libel and slander, business property damage, and liability related to underage drinking. If an intoxicated client causes physical damage to your bar, a liquor insurance policy would not cover the expenses. Any incidents arising from underage drinking are also not covered by any liquor insurance policy, making it the responsibility of the owner to deny entry to minors.
Alcohol Laws
Alcohol regulations, also known as dram shop laws, hold bar owners responsible for damages caused by their intoxicated customers. Most states implement dram shop laws, and even in states that don’t, it is beneficial to apply for liquor liability coverage. If you get sued in a state with no dram shop laws statute, the courts may rule in your favor, but you will still incur the costs of attorney fees, court payments, and other related expenses.
Insurance Provider
The choice of insurance provider affects the type and comprehensiveness of your insurance coverage. Working with an insurance provider that has years of experience in food service insurance provides access to experts who can effectively navigate policy variations and meet specific needs. Experienced insurance providers can make more astute assessments of potential risks and liabilities in your business and even provide supplementary insurance coverage. They can tailor your liquor liability policy to include additional coverage that addresses specific risks associated with your business. Some insurance providers can also customize your policy’s duration if you need a short-term or seasonal policy.
Find a Reliable Liquor Liability Insurance Coverage
Liquor liability policies protect against potential risks, allowing you to grow your business with reduced risk. Some key factors to evaluate, such as coverage limits, policy exclusions, and the choice of insurance provider, affect the type, comprehensiveness, and premiums of your coverage. Contact a reliable insurance provider to discuss your liquor liability policy needs.
