Illustration of different liquor bottles

Ask an Expert – Liquor Liability Insurance

Liquor Liability Insurance offers coverage against claims of property damage and injuries that are the result of the consumption of alcohol. Commonly this coverage is closely associated with taverns, bars, nightclubs, and restaurants that serve alcohol. However, liquor Liability Insurance is not as straight forward as you might think.

So, we asked the experts.

Question: What industries should have liquor liability insurance other than bars, taverns, etc.?

Answer 1: Caterers, hotels, casinos, trade shows that sample liquor, public party facilities that rent their empty lobbies for catered events, Liquor retail stores.

Answer 2: Wedding venues, or private clubs that aren’t in the business of serving alcohol. Need host liquor liability for serving alcohol or offering “set ups” for alcohol.

Answer 3: Caters that offer food and liquor also need a liquor policy for their servers. These servers should also be liquor trained in some sort of TIPS training.

Question: Describe a situation involving liquor where a business who didn’t know they could be liable find themselves liable:

Answer 1: Printing company host a Xmas party, they serve alcohol/wine, an employee on the way home crashed and hurts several people, or worse. The company that hosted the event, would be liable.

Answer 2: Hosting an office party and serving alcohol at the office or a third-party venue.

Answer 3: Let’s say you hold a birthday party at a park district in one of those wooded pavilion areas. Well the person holding the event has to purchase a special event coverage to cover the event so that the park district is not held responsible in the event of a liquor liability claim.

Answer 4: Giving liquor away at a promotional event

Question: Describe something a business could do to reduce their chances of having a liquor liability claim:

Answer 1: Proper liquor liability training – alcohol awareness classes, BASSETT.

Answer 2: Check with a licensed insurance agent for exposure.

Answer 3: Having a “drive home” service to prevent a drunk driving claim. This would be a service that the bar offers to the patrons that could potentially be overserved.

Answer 4: Not selling or giving away liquor is a great way to avoid liability. If it is not part of your regular service just avoid it all together.

Question: Describe a situation involving liquor where an individual who didn’t know they could be liable find themselves liable:

Answer 1:

I have a party at my house, 30 relatives come over and we eat and drink, someone drives and gets injured, the home owner has liability exposure.
Providing alcohol to underage people.
Bartender who was pouring tequila shots down the mouth of an intoxicated patron, over-serving the client.
The valet parking attendant that hands the keys to a customer, who get in car and drives and hurts people.

Answer 2: Having a home party with friends where your serve alcohol.

Question: What is one thing you wish more people knew about Liquor liability:

Answer 1: The ramifications of pour decisions regarding how much is dispensed, and to whom.

Answer 2: It pays a statutory state limit per person and per accident, which is extremely low.

Answer 3: The exposure lies on personal home owners that entertain with alcohol involved just as much as it does a bar or tavern.

Answer 4: In the State of Illinois it’s a law that business that sell liquor must have Liquor Liability insurance.

Question: Name something surprising that is covered under Liquor Liability:

Answer 1: Attorney fees, rehabilitation expense

Answer 2: An injured passenger/s in your automobile can sue the server of the alcohol to the driver that caused an accident, in which that passenger/s were injured. Also, coverage under Liquor Liability provides for “loss of support or means”, for a death resulting from an occurrence.

Answer 3: Assault and Battery is coverage that can potentially be denied that can be picked up usually via endorsement.

Question: Name something surprising that is not covered under Liquor Liability:

Answer 1: Liquor liability “may be” state specific, meaning when you cross state lines the Liquor Liability carrier may not provide coverage in that adjoining or different state.

Answer 2: It’s not that it’s not covered but it is a liquor liability limit in the State of Illinois. The limit for max payout for any single individual or property is $67,356.23. While the usual limit is $1,000,000, this amount is a combined limit to cover a catastrophic loss. Let’s say a drunk driver hits a passenger bus and 10 passengers are hurt they would each receive the $67,356.23 limit up to a max of $1,000,000.

Answer 3: The drinker themselves.


For more information on Liquor Liability contact your Concklin Insurance Agent today!