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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 might cause an accident and injure others, injure themselves, or get their property destroyed. 

The last thing you want to happen is to take the blame for the person's drunken mistakes. This is why we’re going to discuss the things you should know about liquor liability policy, also known as dram shop insurance.

We’ll start off by going over the basics of dram shop insurance. After that, we’ll take a look at its more specialized forms and then discuss how much you can expect a policy to cost you. At the end of everything, we’ll go over some of the best insurance companies.


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Liquor Liability Insurance

States in the U.S. adopt laws that control the selling of alcoholic drinks to consumers. Their purpose is to mitigate the dangers of premature and excessive consumption. Dram shop liability, also known as liquor liability statutes do this. Failure to comply with them might result in the imposition of a penalty up to the revocation of the license to sell liquor.


Because of the drawbacks that dram shop liability might inflict on sellers, insurance companies offer dram shop liability insurance. This insurance policy shoulder the financial burden arising from liquor liability lawsuits. Here are some situations where the insurance policy can help:

  • When the liquor store/bar continues to sell liquor to a habitual drinker in large quantities, and the person hurts another individual or destroys property in his or her drunken rage

  • When the liquor store/bar fails to see that a customer is already drunk and the said customer injures himself or herself by accident

  • When the customer, after consuming excessive amounts of liquor, breaks owned property and injures himself or herself

If a customer files a claim against your business due to any of the reasons above, dram shop insurance will pay for the defense costs, legal fees, and compensatory payments.

Insurance companies offer this in two ways - sell it as a stand-alone policy or as an endorsement to general liability insurance. Buying stand alone liquor liability policy means that you’ll be paying for annual or monthly premiums separately. On the other hand, getting liquor liability policy as an endorsement means that its cost will be added to the premiums of general liability insurance. Between the two, we suggest you go for the second option because policy management easier. Also, you may enjoy cheaper rates.

So which businesses need to get liquor liability policy? The following are businesses that will find the insurance policy very useful:


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Liquor Liability Policy Limits

Liquor liability policy usually has a $1 million per occurrence limit with a $2 million aggregate limit. However, in reality, it all depends on the insurance company where you buy the policy. That said, some insurance companies offer liquor liability policy offering $300,000 - $2 million per occurrence limit and a $2 million aggregate limit.


How Much Liquor Liability Coverage Do You Need?

There’s no general consensus about how much liquor liability policy you need to purchase. It all depends on what kind of business you’re running. With that said, to give you an idea, here’s a table showing the recommended coverage for the businesses we mentioned above:


Ideal Amount of Host Liquor Liability Policy to Have
Grocery stores$2 million aggregate limit with $1 million per occurrence limit
Supermarkets$3 million aggregate limit with $1 million per occurrence limit
Convenience stores$1 million aggregate limit with $1 million per occurrence limit
Bars$2 million aggregate limit with $1 million per occurrence limit
Hotels$3 million aggregate limit with $1 million per occurrence limit
Pubs$2 million aggregate limit with $1 million per occurrence limit
Night clubs$2 million aggregate limit with $1 million per occurrence limit
Liquor stores$3 million aggregate limit with $1 million per occurrence limit
Bistros
$1 million aggregate limit with $1 million per occurrence limit


Host Liquor Liability Insurance

As we said earlier, liquor liability is an insurance policy that protects businesses selling or distributing alcohol against personal injury claims or property damage claims from an intoxicated customer. In other words, if you’re a business that doesn’t make money through liquor products, then insurance companies won’t offer this to you.

But note that insurance companies offer host liquor liability policy, which is usually sold as a short-term insurance policy lasting for hours or days. This is a coverage for businesses not selling or distributing alcohol but serving the drink to guests during gatherings. This will cover medical payments, attorney fees, and other legal costs when a drunken guest becomes injured or sustains property damage.

Host liquor liability policy is available as an endorsement to general liability insurance or as a stand-alone policy. Again, when bought as a stand-alone policy, you'll have to pay premiums separately; whereas when bought as an endorsement, the cost will be added to general liability insurance premiums.

So how much coverage do you need to have? The number of guests will dictate the amount of host liquor liability policy you need to have. Here’s a table that provides you with a brief idea:


Ideal Amount of Host Liquor Liability Policy to Have
10 - 20 guests$300,000 per occurrence limit with $1 million aggregate limit
20 - 40 guests$500,000 per occurrence limit with $1 million aggregate limit
40+ guests$1 million - $2 million per occurrence limit with 2 million aggregate limit


Also read:

Compare Liquor Liability Insurance Quotes Online

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Liquor Liability Insurance for Event

Events such as expos, trade shows, corporate parties, and reunions aren’t complete without drinks that are spiked with liquor. And so, carriers offer dram shop insurance coverage not only for bartenders, pubs, or bars but also for events too. 

Dram shop liability insurance for event is typically included in events insurance together with these other coverages:

  • General liability coverage - Covers the cost of legal fees and compensation if ever injured attendees file a lawsuit 

  • Equipment coverage - Reimburses the policyholder if his or her equipment got damaged or stolen during the event 

  • Damage to rented premises coverage - Allows the policyholder to pay the owner if a rental property got damaged because of the event hosted


In connection, event liquor liability insurance can be purchased as an on-demand short-term policy that typically lasts for only 12 hours or 24 hours. 

So how much coverage do you need to get from liquor liability policy for events? The coverage needed depends on the type of event you want covered. Refer to the table below:

Event Event Liquor Liability Limit 
Awarding and Turnover Ceremonies $2 million aggregate limit with $1 million per occurrence limit 
Company Year End Ceremonies $3 million aggregate limit with $1 million per occurrence limit 
Easter Events $1 million aggregate limit with $1 million per occurrence limit 
Halloween Parties$1 million aggregate limit with $1 million per occurrence limit 
Product  Launch Events$2 million aggregate limit with $1 million per occurrence limit 
Festivals $5 million aggregate limit with $1 million per occurrence limit 


Dram Shop Insurance for Wedding

When there’s a wedding, there’s alcohol. One can't exist without the other.  And of course, the following can happen:

  • Person A gets drunk and starts a fight with person B leaving both injured and needing medical attention

  • Person A owns a car and refuses to take Uber. He drove the car drunk and got involved in a car accident

  • Person A is tipsy and didn’t notice that a portion of the venue’s area is wet. He slipped and fell on the floor sustaining minor injuries that need medical attention

  • Person A suffers from a health condition, which is often triggered by drunkenness. Upon drinking a considerable amount of alcohol, person A lost consciousness, has shallow breathing, and needs to be rushed to the hospital 


Consider getting liquor liability or dram shop insurance for your wedding. You might be wondering what this is. Wedding liquor liability insurance is a type of host liquor liability policy specially underwritten for wedding ceremonies. This coverage is typically offered as a one-day insurance policy - pretty on point since there’s no need to get long-term coverage as wedding ceremonies only last for a day. 


So how does the dram shop insurance for weddings work? The policy offers coverage for the following:

  • Third-party injuries - Someone slips and falls on the wedding venue and is holding you responsible for what happened

  • Third-party property damage - A drunk person drops his phone on the floor and blames you for it


Note that wedding dram shop insurance is included in tailored wedding insurance and bundled with:

  • Personal effects/property coverage - Provides reimbursements equal to the value of items lost during the wedding ceremony 

  • Wedding cancellation coverage - If the wedding is canceled, wedding cancellation coverage will reimburse what was spent on the event venue, decorations, and rental equipment 

  • Personal accident coverage - Covers treatments if the policyholder gets injured during the wedding. Additionally, this will provide coverage to blood relatives named in the policy’s terms 

  • Public liability coverage - Covers the personal injury claims and property damage claims who incurred personal injuries or property damage due to accidents in the wedding reception but not related to alcohol consumption 


How much insurance money can you get from wedding liquor liability policy anyway? Most carriers offer $500,000 - $1 million. However, you can find carriers that offer custom limits starting at $300,000. 

You can have your wedding without liquor liability policy. However, you should know that most event venues require renters to get covered and add them as additional insured. And so, without wedding liquor liability policy, you might find difficulties in finding a place to rent. 


Liquor Liability Insurance for Bartenders

Liquor liability policy for bartenders has a $1 million up to $2 million limit. This policy is useful for bartenders who are working independently or for those who do bartending outside other than the bar or pub they’re working for to get extra income. 

Liquor liability coverage for bartenders is offered as a long-term policy and as a short-term policy.  Short-term bartender liquor liability lasts for one day or three days. 

Bartenders can do two things to have liquor liability coverage. They can purchase the insurance as a stand-alone policy. Or if they already have general liability coverage, it’s better to add liquor liability to their existing policy for convenience. 

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Liquor Liability Insurance 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 business liquor liability insurance coverage, 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 high risk because they assume that they must be doing something wrong, even if the claims were due to simple bad luck.


Cost per MonthCost per YearBest for
CoverWallet$45$540Dram shop liability insurance quotes comparison online
Thimble$47.66$571.92Short-term liquor liability policy packaged in event insurance together with general
NEXT$56.31$675.72Host liquor liability
Progressive$76$912Brewery and winery liquor liability policy
Flip Program$80$960Combined general and liquor liability


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 $61 per month and $732 per year.


Host Liquor Liability Insurance Cost

The cost of host liquor liability policy 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 $215 for a 24-hour coverage. 

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 for 24-hour coverage. 

Compare Liquor Liability Insurance Quotes Online

Get all the best quotes from leading providers in a click of a button!

Best Liquor Liability Insurance Companies

If you want to get the best coverage, then look through various liquor liability insurance carriers. 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 companies.


CoverWallet Liquor Liability Insurance


Pros

  • Free certificate of insurance online

  • Manage your liquor liability policy with the MyCoverWallet App

  • Compare the liquor liability quotes of different carriers 

Cons

  • An insurance broker, not a carrier 


CoverWallet offers the liquor liability quotes of its partners to customers such as caterers, restaurants, bartenders, event organizers, and more. The liquor liability policy from this company is a stand-alone policy. However, CoverWallet doesn’t say that endorsing the coverage to general liability isn’t allowed. And so, contact a CoverWallet agent to ask if you can do this option. 

We suggest you work with CoverWallet because it will insure you quickly online. With this company, there are no lengthy talks with insurance agents to get covered. Also, you can pay premiums online and get proof of insurance in less than five minutes. 


Best for: Liquor liability policy quotes comparison online

Average cost: $45 per month

Our rating: 10/10


Thimble Liquor Liability Insurance


Pros

  • Free online proof of insurance

  • Get covered online

  • Cancel your policy anytime 

Cons

  • Claims filing can only be done online


Thimble’s liquor liability coverage is packaged in its event insurance, which is available as a short-term policy by the hours, days, weeks, or months. General liability insurance is bundled too. And so, with Thimble, you can get two coverages in one purchase. 


Best for: Short-term liquor liability policy packaged in event insurance together with general liability coverage

Average cost: $47.66 per month

Our rating: 9/10


NEXT Liquor Liability Insurance


Pros

  • Online-only process

  • Short-term host liquor liability

  • Quick to respond to claims

Cons

  • Expensive


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 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 coverage that can be purchased for shorter intervals.


Best for: Host liquor liability coverage

Average cost: $56.31 per month

Our rating: 8/10


Progressive Liquor Liability Insurance


Pros

  • Easy online claims process

  • Offers separate liquor liability

  • Affordable

Cons 

  • Slow to respond to claims


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

Progressive offers their customers liquor liability coverage 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 business.


Best for: Brewery and winery liquor liability policy

Average cost: $76 per month

Our rating: 7/10


FLIP Liquor Liability Insurance


Pros

  • Offers a choice of general or liquor liability

  • Offers annual and event policies

  • Easy to get a quote

Cons

  • A bit pricey


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 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.


Best for: Combined general and liquor liability coverage

Average cost: $80 per month

Our rating: 7/10


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