Dram shop laws
Laws that make alcohol sellers liable for harm caused by intoxicated customers are often called dram shop laws. They vary widely by state, both in when a seller is liable and in what damages can be recovered. Your agent can explain how your state's rules affect your coverage needs.
Why a separate policy
General liability policies commonly contain a liquor liability exclusion for businesses that sell, serve or furnish alcohol. That leaves restaurants and bars needing liquor liability coverage written separately or added by endorsement. Some landlords and liquor license authorities require proof of it.
What affects the cost
- Alcohol sales as a share of total sales
- Hours especially late-night service
- Entertainment such as live music or dancing
- Server training programs
- Security staff and incident procedures
- Prior liquor claims
Reducing the risk
Train servers to recognize intoxication and refuse service, check identification consistently, keep incident logs and offer food and non-alcoholic choices. Some insurers ask whether staff have completed a recognized responsible alcohol service program.
Assault and battery
Fights between guests are a common bar claim. Some liquor and liability policies exclude or sublimit assault and battery. Ask how your policy treats it, especially if you have security staff.
Certificates and proof
Landlords, event venues and liquor license authorities may ask for a certificate showing liquor liability limits. Ask your agent to issue them directly, and keep a copy with your license paperwork.
Frequently asked questions
Do I need liquor liability for BYOB?
Possibly. Even if you do not sell alcohol, allowing it on the premises can create exposure. Ask whether your general liability covers it.