Liquor Liability Insurance

Hosting an event during which alcohol will be served for Saint Patrick’s Day or any other day? Read on!

At our agency, one of the most frequently asked questions we receive is: “I want to have a party.  If liquor is served, is this covered by my liability policy?”

A straightforward question that has multiple answers!

Liquor Liability Coverage

Let’s look at some basic situations for both groups and individuals:

An event at your group or association might be covered through the group or association's policy if they: 

• Sponsor the event serving wine, liquor, or beer,

• Ensure liquor is only sold with bartenders serving it, 

• and either the organization or the bartenders already have liquor liability insurance.

Here is an example of one association’s wording that would provide certain coverage:

Liquor Liability for injury to a third party arising from the selling, serving, or furnishing of alcoholic beverages. Coverage is included for a club that is selling, serving, or furnishing alcoholic beverages.

• If a liquor license is required, you must have the liquor license in place, or liquor liability will not be provided. The policy excludes injury arising out of any alcoholic beverage while any required license is not in effect.

In the event of an organization’s fundraiser selling liquor, the products cannot be opened or consumed on-site. 

Note that all applicable state and local liquor laws must be followed in order to have the liquor liability coverage in effect. The insurance coverage alone is insufficient.

At a private residence, the host is responsible for the liquor served. So, it is the responsibility of the host to ensure that no one leaves under the influence and has a designated driver for the individuals. 

At a rented hall where the host is 100% responsible for serving the liquor, either a trained bartending staff has liquor liability insurance or the host purchases the insurance. It makes no difference if the liquor is purchased by the guest or furnished gratis by the host. The host is the responsible party, whether it is a cash or open bar.

The follow-up question that people have: What is the insurance cost? 

Insurance costs are based on the event, location, stated hours, and the estimated number of people attending the event.  Restaurants, hotels, and clubs purchase liquor liability insurance based on the annual estimated dollar amount sold of food versus the liquor. Neighborhood bars and taverns that don’t sell food primarily will pay higher rates.

Remember, too, that insurance coverage is only part of event planning for protection against liability.

Be a Responsible Host

As a host whatever the event, you hope that if people drink, they drink responsibly. You can take some simple steps to protect them and you. Pay attention and do your utmost to make sure people are not drinking and driving. Check to see if there are designated drivers, for example. Qualified bartenders also understand the importance of cutting people off–make sure they know that you will back them up if they are challenged.

And make sure you are protected against liability claims. No one wants the worst to happen, but with some planning ahead of time, you can minimize the financial impact on you. Call us first to discuss your event and understand how important it is to keep yourself protected with the right coverage. This will save you time, money, and untold aggravation!