If you are in the business of manufacturing, selling or serving alcoholic beverages, you need to be aware that liquor-related claims are excluded under a standard Commercial General Liability policy. You may be asking How does a business that manufactures, sells or services alcoholic beverages have coverage for alcohol-related damages or injuries? Welcome to Liquor Legal Liability Coverage.
Liquor Legal Liability is also commonly referred to as Dram Shop Liability. Dram Shop Liability Laws have been enacted in 43 states. These Dram Shop Laws generally hold any business or host that serves liquor to a drinker who is intoxicated strictly liable to anyone injured by the drunken guest. Liquor Legal Liability coverage protects the business in the event of someone getting drunk to the extent that the inebriation results in injuries or property damage. It is logical to think that the intoxicated person should be personally liable. However, the business that served, sold or manufactured the alcohol could also be liable. This could mean being named in a lawsuit and forced to cover legal costs, court fees and any awarded damages.
When purchasing Liquor Legal Liability coverage there are a few points to be aware of:
- Assault & Battery Coverage: If you own a restaurant, bar, nightclub or similar establishment, you need to be sure this coverage is included on your General Liability as well as on your Liquor Legal Liability policy. This provides the necessary liability coverage if an employee injures an intoxicated patron or if two intoxicated patrons injure each other in your establishment.
- If you have Umbrella or Excess Liability be sure it extends over Liquor Legal Liability.
- Liquor Legal Liability policies are based on several factors. A few of the key factors are: total alcohol sales, number & frequency of claims, where your business is located, type of liquor license and the type of establishments.
- A few preventive measures you should take:
- Have all bartenders receive TIPS Alcohol Training.
- Have a system in place not to serve clearly intoxicated guests.
- Provide ongoing alcohol awareness education and training to all employees.
Working with an Independent Agent can ensure the proper coverages are in place for your business. It is important to shop and review all quotes, since there are many different options within this coverage. Contact one of our team members at the Ten Eyck Group to review and help protect your business!