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Liquor Liability Insurance & Dram Shop Insurance

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Whether you work as a bartender or you work in a liquor store, serving people alcohol exposes you to a lot of liability because of what people may do while they’re drunk. Some people can hold their liquor and won’t give any trouble while others - let’s just say their personality changes from white to black. 

The last thing you want to happen when you’re dealing with that latter group is to take the blame for their drunken mistakes. This is why we’re going to spend this guide talking about the things you should know about liquor liability insurance, also known as dram shop insurance.

We’ll start off by going over the basics of liquor liability insurance and how it differs from other forms of liability insurance. After that, we’ll take a look at more specialized forms of liability insurance before we discuss how much you can expect a policy to cost you. At the end of everything, we’ll go over some of the top liquor liability insurance companies.

Liquor Liability Insurance

Also referred to as dram shop liability insurance, liquor general liability insurance applies if a drunk customer gets intoxicated, starts running out of breath, and faints. Immediate hospitalization is needed to save the customer's life when this happens. One thing to note is that if you have general liability insurance, you'll never pay a dime for the hospital fees using your own money.  

It's more problematic if the customer turned out to be a minor as a lawsuit can be filed against you. If this does happen, there's no need to worry if you have liquor general liability coverage ready because it will give you the funds to afford the services of an attorney. 

Dram shops and liquor stores can opt to get general liability insurance as a stand-alone policy. However, it's best to get it together with commercial auto coverage in the form of a business owner's policy. Business owners' policy looks expensive at first glance. However, it allows you to save costs for premiums than when getting commercial auto and general liability coverage individually. 

Host Liquor Liability Insurance

Liquor liability insurance can apply to more than just businesses that serve alcohol regularly, however. If you are hosting an event or a party where alcohol is being served, you may wish to get your hands on host liquor liability coverage to keep yourself protected from litigation arising from:

  • A faulty sound system that causes a loud screeching sound causes mass panic and injures people
  • Employee getting injured by an unruly attendee of the party who is already drunk and wants more drink
  • Poorly kept hosting facility with mold overgrowth causing allergic reactions 
  • Too flashy LED lights may cause people to suffer from dizziness, fainting, or seizures

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Liquor Liability Insurance for Event

Liquor liability insurance for the event comes in the form of short-term general liability policies that lasts for a single day or weeks. Short-term general liability insurance has the same function as standard general liability insurance. Note that it's more expensive with premiums starting at $100 minimum. 

Liquor Liability Insurance for Bartenders

Bartenders may also need to get their hands on a liquor liability insurance policy, though this is usually provided by their employers if they’re working at an established bar. Always be sure to check in with your employer to make sure that you’re covered when you’re serving people drinks.

If you work as a freelance or mobile bartender, then you may need to go out and get your own liability coverage. This will typically be more affordable than liquor liability coverage paid for by an employer as its cost is based on the standard pricing of insurance for small businesses and independent professionals. 

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Liquor Liability Insurance Coverage Cost

There are a few factors that go into determining how much you can expect to pay for your liquor liability policy. This means that it’s pretty difficult to get an estimate of how much it’s going to cost you if you’re not willing to go through the whole quote process for your company of choice.

As we mentioned above, the duration of your insurance policy is one thing to account for. Shorter policies will cost you less overall but they will typically cost you a lot more per day. You’ll also have to consider whether you’re getting a policy as a bartender or as a business.

If you’re getting a liquor liability policy for a business, you’ll need to account for the size of the business, since that will amplify the risk that the insurance company is taking when they cover you. This is due to the larger number of customers that you’ll have, making it more likely that someone will do something worthy of a claim.

Also, as we briefly mentioned before, insurance companies care about whether you’ve had to make a claim in the past. These companies see people who frequently make claims as a high risk because they assume that they must be doing something wrong, even if the claims were due to simple bad luck.

CompanyCost per monthCost per year
Progressive$76$912
FLIP$80$960
NEXT$82$984
Average Cost$79.30$952

To get these costs, we took a small- to medium-sized bar that has no history of making prior claims. We did this to make sure that these values are as close to the average as possible. The average cost of alcohol liability coverage is about $79.30 per month and $952 per year.

Host Liquor Liability Insurance Cost

The cost of host liquor liability insurance is lower than that of a bar because of the fewer risks that an insurance company is taking by covering you. If you’re the host of a smaller event, you can expect to pay as little as $225 per year for your liquor liability insurance policy.

However, if you regularly host larger events, you may find yourself paying more for your liability coverage. For example, some event hosts have to pay as much as $500 per year for coverage.

Compare Liquor Liability Insurance Quotes Online

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Best Liquor Liability Insurance Companies

If you want to get the best liquor liability insurance policy, then look through various  liquor liability insurance companies.But that will take a lot of effort and so, we’ve gone ahead and included this section in our guide that will cover three of the best liquor liability insurance carriers.

Progressive Liquor Liability Insurance

Progressive started off in the late-1930s, and the company is one of the most innovative insurers in the United States.

Progressive Policy Details

Progressive offers their customers liquor liability insurance and they work with bars, restaurants, caterers, grocery stores, liquor stores, and more. When determining the cost of your insurance, Progressive looks at how many liquor sales you make, your location, and your profession.

Pros
  • Easy online claims process

  • Offers separate liquor liability

  • Affordable

Cons 
  • Slow to respond to quotes

Average cost: $76

Best for: Online liquor liability insurance

Our rating: 5/5

FLIP Liquor Liability Insurance

FLIP stands for the Food Liability Insurance Program, and this company focuses on providing coverage to workers and businesses in the food and beverages space. Instead of offering a wide range of disparate coverage options, FLIP adapted their insurance to work equally well for business owners and workers.

FLIP Policy Details

FLIP offers a range of different coverage options, allowing you to get your hands on liquor liability coverage over the course of the year or just for a single event. You can choose between just liquor liability or you can also opt for general liability bundled in with liquor liability coverage.

Pros
  • Offers a choice of general or liquor liability

  • Offers annual and event policies

  • Easy to get a quote

Cons
  • A bit pricey

Average cost: $80

Best for: Combined general and liquor liability

Our rating: 5/5

NEXT Liquor Liability Insurance

NEXT Insurance is similar to Progressive in that they try to adopt as much cutting-edge technology as they can to cater to the needs of their customers. For example, they have worked on making their insurance quote and management process online-only.

NEXT Policy Details

NEXT offers a variety of liquor liability policies, including a traditional policy that will pay out for both damages and legal expenses incurred by an intoxicated patron. Along with that, they also have separate host liquor liability insurance policies that can be purchased for shorter intervals.

Pros
  • Online-only process

  • Short-term host liquor liability

  • Quick to respond to claims

Cons
  • Expensive

Average cost: $82

Best for: Host liquor liability

Our rating: 4/5


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