Craft beer and cocktails are all the rage these days — and everywhere, it seems. No longer limited to bars, breweries or wineries, you can sometimes purchase a drink at your local golf course, retail shop or even grocery store, letting you sip as you walk the aisles. 

That’s great for the revelers among us, but it also presents some thorny liability issues for businesses selling alcohol. What if your employee overserves a guest or an already-intoxicated customer? What if that person causes an accident or gets in a fight on the way home? What if your employee serves a minor? 

Depending on where your business is located, you could be on the hook for legal fees, settlements and medical bills, even if the customer visited other businesses before yours or your employee didn’t realize they were intoxicated. Defending against liquor-related claims can now cost tens of thousands of dollars — and that’s not including the prospect of hefty judgment in the event of major injury or death. 

Liquor liability insurance can let your customers enjoy their cocktails with less risk. Whether you’re serving them alcohol, selling it to them to take elsewhere, or hosting an event like a conference or wedding, this specialized line helps protect from claims related to intoxicated guests. 

This type of coverage, also known as dram shop insurance, has long been familiar to alcohol-centric businesses like bars, breweries, restaurants and wineries. However, it’s also expanding outside the hospitality industry as more and more businesses offer alcohol on their premises. 

Long story short: If your business sells beer, wine or spirits, you need to make sure you’re protected. 

The basics of liquor liability insurance 

Businesses in the 43 states and the District of Columbia where dram laws are on the books could be held liable for the actions of “obviously intoxicated” individuals who were served or sold alcohol at their establishment or event. 

Liquor liability insurance is designed to protect both the general public and the covered business from injury, death and damage claims. 
Most states require a minimum level of coverage as a condition of holding a liquor license. It’s important to note that liquor liability coverage is typically excluded from a company’s general liability insurance, meaning it needs to be purchased as an addition to your businessowners policy or as a standalone (monoline) policy. 

Due to the higher risks and claims that come with serving alcohol, finding suitable coverage can take effort — especially for businesses like bars and concert venues, where much of the revenue is derived from liquor receipts. Not all insurers offer liquor liability coverage; those that do may restrict their coverage limits for certain claims, such as assaults, or prohibit things like drink specials or late-night hours. 

Premiums for liquor liability insurance can vary widely, depending on the type and size of your business, how much coverage you need and your location. Bars are predictably more expensive to insure; those businesses with a history of insurance claims or liquor license infractions may find themselves with few options for coverage. 

When you’re ready to protect your business from liquor liability claims, we’re ready to help. Reach out to a friendly UFG agent today to discuss your options and tailor coverage for your company’s specific needs. Cheers!