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.
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:
Other businesses that sell or distribute liquor
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.
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|
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|
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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|
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 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.
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 Month||Cost per Year||Best for|
|CoverWallet||$45||$540||Dram shop liability insurance quotes comparison online|
|Thimble||$47.66||$571.92||Short-term liquor liability policy packaged in event insurance together with general|
|NEXT||$56.31||$675.72||Host liquor liability|
|Progressive||$76||$912||Brewery and winery liquor liability policy|
|Flip Program||$80||$960||Combined 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.
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.
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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.
Free certificate of insurance online
Manage your liquor liability policy with the MyCoverWallet App
Compare the liquor liability quotes of different carriers
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
Free online proof of insurance
Get covered online
Cancel your policy anytime
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
Short-term host liquor liability
Quick to respond to claims
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
Easy online claims process
Offers separate liquor liability
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
Offers a choice of general or liquor liability
Offers annual and event policies
Easy to get a quote
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
Lonnie Bell Insuranker
Policy Type: Business Insurance
Company name: Employers Insurance
Use anyone except Employers. Period. They are non-transparent and shameful. After I complained long enough to warrant a call from a supervisor, the supervisor called back from a PRIVATE NUMBER (no caller ID), left a message that they are not reversing their decision (without any communication with me), and failed to leave a phone number for me to call back. She was hiding! They also fact find via email and phone calls, which is terrific for speed and communication. However, after setting a precedence of email or phone calls, they send time sensitive information via email, without any heads up... they are hoping you miss it and forfeit via expiration. Evil policies. Go elsewhere.
This place is an absolute joke of a company and should be ashamed of the way they conduct business. I was hurt on the job at the end of July and it took them just shy of 7 weeks to issue out a paycheck to me. Yes the amount was back dated but still. Not many have the luxury of not receiving a paycheck for almost 2 months. To top it all off, the original adjuster marked me down for the wrong state which caused a problem from the get go, I've had 3 different adjusters now since each one can't seem to figure out the simplicity of my claim. All my paperwork which includes, my job, house, and drs visits all are from the same state and city but yet some how I have been filed under a completely different state 1500 miles away. They do not answer your phone calls or emails no matter how many you leave. I've had to escalate my frustrations to the supervisors of each of these individuals in order to even get some kind of response. I've had more communication and information given to me about my claim from the customer service representatives then the actual adjusters.......... please tell me how that works?! A serious overhaul needs to happen here in order to serve your clients the way they deserve to be taken care of. 10/10 do not recommend this company to a single soul on earth
I have never had the displeasure of working with a more incompetent and disrespectful person in my life. I’m an injured worker and the adjuster that was assigned to my case was named Carrie Furgeson. In the past 6 weeks that I’ve been injured and out of work I have only been able to get ahold of her twice, not for lack of trying. I have left countless voicemails, countless emails, and she ignores them all. When I am finally able to get ahold of her I’m greeted with terrible customer service. She is rude, she talks over me and I’m hardly able to get a word in edgewise. She spelled my name wrong on my documents even after I spelled it for her properly countless times, this caused a whole new issue with my bank. I have bill collectors from the hospital calling me demanding payment and Carrie Furgeson won’t do a single thing to help, or to get them paid. All of my documentation is in Colorado, my job is in Colorado, my address is in Colorado, all my Dr offices and appointments have been in Colorado and Carrie still managed to hold my claim because she wasn’t sure what state she needed to file it under. It’s been 6 weeks since my Injury and my company still hasn’t received the wage paperwork to fill out so they can get me my correct wages. When she’s not ignoring me she’s answering my questions with “I don’t know” well I don’t know how she got this job, because apparently she doesn’t know anything about it. She is a disgusting morose individual inside and out and I genuinely wish her the worst in all of her future endeavors. I highly recommend you don’t use this company. Please if you are a business owner and your looking into this company please don’t use them. I’m sure they have the cheapest payment and that’s why companies use them in the first place, but you will be doing your employees a grave disservice by forcing them to venture into this absolute dumpster fire of a company. I would rate 0/5 if possible but 1 was the lowest I was allowed.
Their general liability insurance purchase process is simply the best online experience I've ever had in my life!
As long as they cover your line of business, you're literally covered! best rates, best coverage, best online experience, best professionals, can't be happier that I chose them!