So you want to get an alcohol license. That's sure to be a boost in your revenue — but it could also increase your risk. Alcohol can lead to alcohol-related damages and injuries, and that's something that needs to be covered by insurance. Do you have the insurance you need to protect your business?
Does Your Current Insurance Policy Cover Alcohol?
Many business policies have a limited amount of alcohol insurance, such as host liquor liability insurance. But this host liquor liability insurance isn't intended to cover your consumer alcohol license, it's intended to cover business functions.
If you had a company Christmas party and someone drank too much and became injured, your liquor host insurance would cover it. But if you served alcohol to a consumer, it likely wouldn't be covered.
Do You Need Liquor Liability Insurance?
If you're going to sell alcohol as a business (or manufacture or bottle it), then you will need liquor liability insurance. Liquor liability insurance is a special, add-on insurance that is meant to mitigate the risks inherent to having an alcohol-related business. When a business serves alcohol, its liability generally increases.
Liquor insurance helps you keep these costs down, whether the costs are from property damage, injuries and medical care, or even lawsuits and legal damages.
What Does Liquor Liability Insurance Cover?
Every liquor liability policy is a little different, but most will cover the following:
- Fights that break out in your establishment. "Assault and battery" coverage will cover you for injuries that occur due to these fights, and property damage (such as someone breaking a watch during a fight).
- Legal costs associated with claims. Claims can be levied against your business even if they're false, and those claims could be quite expensive. An insurance policy will pay for the charges associated with them.
- Employee misconduct. What if your employees drink, even though they're not supposed to, and get injured or injure someone else? A liquor liability policy may cover employee misconduct, including an employee over-serving alcohol when they've been directed not to.
You will want to look for a policy that covers most of these items, insofar as they're applicable to your business.
How Much Does Liquor Liability Insurance Cost?
The cost of your liquor liability insurance often depends on where your business is located. If your business is located in an area that sees many alcohol-related claims, your insurance will be higher. On the other hand, your liquor liability insurance may go down in price if you're in business for a long time without any incidents.
You can usually expect to pay between $250 and $2,500 a year. That's a large difference, but that's because there are different types of licenses. You can get a license for a small amount of beer and wine sales, which is quite different than a license to have a full bar. Each license type involves different amounts of insurance coverage, hence the difference in cost.
Some insurance companies offer discounts if you and your employees go through responsible alcoholic beverage training. You can ask your insurance agent whether such discounts are available for you.
How Do You Get Liquor Liability Insurance?
Now for the good news: it isn't difficult to get liquor liability insurance. Most business insurance companies can underwrite a policy. If you're a relatively new business that plans a large amount of liquor sales, however, be prepared to see a hefty price tag attached. Keep in mind, however, that the cost of not having insurance can much higher in the long run.
Before you make any decisions about liquor licensing, you should talk to an insurance company. Contact Harr & Associates Insurance, Inc., for a consultation today.
