Liquor Liability Insurance

What is Liquor Liability Insurance?

Liquor liability insurance is defined as coverage for bodily injury or property damage caused by an intoxicated person who was served liquor by the policyholder.

The breadth of liquor liability coverage varies by state because each state has its own interpretations and evidence requirements of who is legally liable in the event of an injury to a third party.
"Dram shop liability,” or social host liability, holds a social or commercial host liable for injuries inflicted on a third party by an intoxicated guest of the host’s event or establishment.

In some states, every bar in which an intoxicated person drank can be pulled into a lawsuit if the person causes bodily injury to a third party. The establishment must prove that the patron was not or did not appear intoxicated while there. Other states require proof that the establishment sold alcohol to the intoxicated individual, injuries were sustained and the injury was the direct result of the individual’s intoxication.

If liquor liability is covered by a homeowners insurance policy, it may be limited to $100,000 to $300,000 in coverage. Many carriers offer discounts on liquor liability coverage to establishments that provide alcohol awareness education and training to employees.

Most states in the US require establishments that sell alcohol to carry liquor liability insurance.
Most liquor liability insurance policies exclude the selling of alcohol illegally, such as selling liquor to a minor.
Most liquor liability policies are sold as a stand alone policy or packaged with a general liability policy.

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