What is it?
Who needs it?
What is liquor liability insurance?
Selling alcohol carries inherent risks, as businesses can potentially be held accountable for incidents involving the intoxicated patrons that they serve. Liquor liability insurance provides a means for businesses in California to mitigate the risks associated with serving adult beverages.
Liquor liability insurance is tailored for businesses that sell alcohol. Policies typically cover associated risks, which are often excluded from other liability coverages.
Like most liability coverages, liquor liability will usually help with attorney fees, court fees and settlements if a business has a valid claim.
Which businesses in California require liquor liability coverage?
Most businesses that alcohol should have liquor liability coverage. Although California doesn’t require coverage statewide, many local governments do and coverage is recommended regardless. Bars, restaurants, wineries, nightclubs and many other establishments might purchase a policy.
Because liquor liability requirements vary by county and municipality, businesses that need coverage should work with a California insurance agent who knows liquor liability policies well. A good agent will know how to check local requirements, and then be able to recommend a policy that both meets any local requirements and projects a business well.
Do wedding hosts need to purchase liquor liability coverage?
When alcohol is being served at a wedding, hosts might indeed need or want liquor liability coverage. Some municipalities and counties require that even weddings have coverage if the hosts are to legally serve alcohol. If there isn’t any such requirement locally, it’s still recommended to consider the benefits that coverage offers.
What limits should businesses select for their liquor liability policies?
When evaluating what limits to select for a liquor liability policy, it’s helpful to consider just how expensive a single serious incident could be.
For this exercise, assume a fight between two customers. This one fight could potentially lead to multiple serious lawsuits:
- Either customer involved in the fight may sue, arguing that the business overserved the other party
- A bystander might sue if they were injured while trying to avoid the altercation, perhaps by a mislaid punch or inaccurately thrown object
- Another bystander might sue for psychological distress that they sustained when witnessing the incident
Even if these lawsuits are eventually dismissed from court, the defense costs alone could financially cripple a business if there’s no liquor liability coverage in place.
What types of incidents are covered by liquor liability policies?
Liquor liability policies can cover a broad range of incidents. Depending on the policy’s specifics, it might offer coverage for lawsuits related to:
- Common “slip and fall” accidents involving intoxicated customers
- Sexual assault committed by an intoxicated customer
- Other forms of physical assault by an intoxicated customer
- Public altercations involving multiple intoxicated customers
- DUI auto accidents caused by intoxicated customers on their way home
- Cases of alcohol poisoning that land an intoxicated customer in the ER
Do general liability policies cover incidents involving intoxicated customers?
General liability insurance usually isn’t a substitute for liquor liability coverage. While general liability typically covers standard “slip and fall” accidents, it typically excludes such incidents when the injured party is intoxicated. It also doesn’t cover many of the other scenarios listed above.
Many businesses that serve alcohol purchase both general liability coverage and liquor liability.
How can businesses find liquor liability insurance?
For assistance with liquor liability insurance, contact the independent insurance agents at Heffernan Walton Insurance. Our California agents have experience working with a range of businesses including stores, restaurants, bars and others that sell alcohol. We have the expertise necessary to make sure your business is well protected when serving or selling to customers.