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Liquor Liability Coverage

Many businesses have the majority of their exposures against lawsuits covered by a standard, general liability policy. One exposure that business owners and managers rarely consider involves alcoholic beverages. A typical liability policy for a business excludes coverage losses that involve:

· causing or contributing to the intoxication of any person

· furnishing alcoholic beverages to a person under the legal drinking age

· furnishing alcoholic beverages to a person under the influence of alcohol

· any statute, ordinance or regulation related to the sale, gift, distribution or use of alcoholic beverages.

However, the exclusions only apply to businesses that make, distribute, sell, serve or furnish alcoholic beverages. This means that most companies are covered for their liquor liability exposures, such as holiday parties. However, the companies that are in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages need to find coverage elsewhere. Such operations may find their special coverage need handled by a Liquor Liability policy.

This type of insurance protects bars, restaurants, hotels, motels, package liquor stores or other places where liquor is sold, distributed or served. It handles claims involving injury or damage caused by customers who were provided liquor by the covered business. Such policies are designed to cover common law and statutory liability exposures faced by:

· businesses that sell/distribute alcoholic beverages

· owners, lessees or mortgagors of the property that houses the businesses that sell/distribute alcoholic beverages

A liquor liability policy will handle claims that a covered business faces because it is responsible for damage or injury to other parties. Specifically, the insurance policy covers only injury or damage an insured has caused due to its serving or selling/furnishing alcoholic beverages. Therefore, a business must treat the liquor liability policy as extra protection that supplements its general liability protection.

Liquor liability policies will protect a business from a variety of situations such as:

· A package liquor store is sued by parents of minors who were harmed after that store sold them wine

· A bar owner is sued by a customer who was injured while being ejected by that bar's "bouncer"

· A grocery store is sued by a customer who is hurt when a beer display falls on them as the customer was reaching for a case

· A restaurant is sued by a karaoke singer who is hurt during a fight in the restaurant's lounge during karaoke night

However, the liquor policy also has some important exclusions. For instance, it only responds to losses involving the insured businesses owner and employees (not friends and relatives). Also, there is no coverage for harm that is due to intentional (deliberate) acts. Neither is coverage provided in instances involving the actual product being sold or distributed (imagine customers suing a bar that served homemade beer that causes food poisoning).

Operations that have a significant liquor exposure should be sure to contact an insurance professional and arrange for proper coverage. It's the sober thing to do.

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