Restaurants and bars that serve alcohol must consider liquor liability insurance to go along with a standard business insurance plan. Liquor liability is special add-on coverage to protect your establishment if a customer gets too drunk and causes damage to themselves or others. Here's why you need this coverage to avoid extreme financial challenges.
Chances are your commercial general liability (CGL) insurance plan only covers so much in terms of liability. It might pay for storm damage or loss from theft, but it doesn't necessarily cover every type of lawsuit you might face.
Alcohol can create unpredictable consequences in public if someone has consumed too much of it. Your establishment can be held liable if a staff member serves an obviously drunk person alcohol and they incite violence. Public drunkenness is dangerous, as it can lead to fistfights and bodily harm. If you serve liquor, you need to be aware of your legal requirements in your state because a bartender can wind up in jail for serving alcohol to drunk customers or minors.
Liquor liability pays for legal costs, including court settlements, when a nightclub, restaurant, bar or liquor store faces a lawsuit involving a drunk patron. The worst-case scenario is when a bartender serves alcohol to an obviously intoxicated person who then gets into a car and kills someone in an accident. This type of lawsuit can sink a business quickly with legal costs unless it has the right liquor liability coverage.
Liquor liability coverage alone still is insufficient for many venues, as they need other types of coverage to fill the gaps. Assault and battery insurance is helpful to a bar with a bouncer. When trouble erupts in a bar, a bouncer might have to use excessive force that may lead to a lawsuit if it causes bodily injury. Assault and battery coverage pays for the times your company goes to court over your bouncer breaking someone's jaw or wrestling them to the ground.
Every business involved with serving alcohol needs to consider the risks it faces when customizing an insurance plan. The location of the establishment is a big factor in insurance rates, since certain zip codes have predictably high crime rates. If the bar atmosphere is wild on weekends with loud music and plenty of booze, risks will be higher than in a small quiet bar. Drunk people dancing can swing out of control and bump into another person, triggering an altercation.
Your business might be able to save money on insurance by bundling different types of coverage together. Another way to cut insurance costs is to let your insurance agent know your business is taking proactive steps to reduce risks. Installing security cameras, for example, signals to the insurer you are making an effort to reduce the possibilities of filing a claim.
Every bar or restaurant has its own unique profile based on its neighborhood, owners, and patrons. These factors make it impossible to generalize what businesses need to protect themselves from lawsuits. Liquor liability is one of the puzzle pieces of insurance that most venues serving alcohol need to protect staff members from dipping into their own pockets for legal expenses.
You cannot always control what patrons do at your venue, but you can use risk management to create a safer environment. Insurance is an effective form of risk management. At Club Agency Insurance Brokerage, our agents can help you customize your insurance according to your needs. Contact us today to learn more!