With the holidays just around the corner, party planning is in full gear. If your business is planning a holiday party this year, you are probably going down the checklist to ensure that you are fully prepared for the big event. One thing that many business owners leave off their to-do list is to acquire liquor liability insurance. When alcohol is involved, there can be unexpected consequences. Having a liquor liability policy can help protect your business from certain liability claims.
Liquor Liability Insurance and Why It Is Needed
Liquor liability is a type of insurance policy that provides coverage for property damage or bodily injury caused by an intoxicated person who was served alcohol by the policyholder. If there is alcohol sold or served at your holiday party and someone becomes intoxicated, resulting in injury or damages, you could be held liable for medical costs, legal fees, and settlements. Liquor liability insurance protects against these types of incidents to ensure that a fun holiday party does not result in your financial downfall.
There is a common misconception that liquor liability insurance is only required by businesses that regularly sell or serve alcohol, such as bars, taverns, lounges, and nightclubs. While these types of businesses do require liquor liability, they are not the only type of business that can benefit from having a policy. Company holiday parties and alcohol often go hand-in-hand. While many of these events have no problems, there is always a risk that an accident could occur. This puts your guests or property at risk. Liquor liability insurance is an effective way to protect yourself.
When deciding to purchase a liquor liability insurance policy, familiarize yourself with dram shop laws. These are laws that hold businesses accountable for inebriated patrons if they serve alcohol to someone who is already intoxicated or close to it. In total, 43 states, as well as the District of Columbia, have taken the necessary steps to enact dram shop laws. This is in response to a large number of DUIs that have occurred, resulting in significant injuries and wrongful deaths. The only states that do not currently have dram shop laws are Nevada, Maryland, South Dakota, and Virginia.
Like most businesses, you probably already have a general liability insurance policy. This type of standard business policy protects your company against property damage, bodily injury, and personal and advertising injuries. Your policy may also include host liquor liability insurance. This type of coverage provides protection if you are a social host, meaning it protects against claims that result from the incidental service of alcohol. However, not all general liability insurance policies offer this type of coverage, and even if your policy does, it may not provide enough protection for your holiday party.
What Liquor Liability Insurance Covers
Liquor liability insurance provides comprehensive protection for a wide range of incidents that stem from serving alcohol. Some of these contingencies covered by liquor liability insurance include the following:
Drunk driving – If you serve alcohol at your holiday party and an intoxicated patron becomes involved in a drunk driving accident, you could be held liable.- Assault and battery – A fight could break out between intoxicated guests at your party, resulting in serious injury. If you are responsible for serving alcohol, you could be found at fault.
- Sexual assault/harassment – Some guests at your party may drink to excess, leading to sexual assault or harassment of another person. Since you are providing the alcohol that led to the assault, you may be liable for damages.
- Slip and falls – Drinking alcohol can lead to a loss of balance. If an intoxicated patron should slip and fall on your premises, your liquor liability insurance would kick in to pay for medical costs.
- Bodily injuries – A liquor liability insurance policy may also pay for other physical injuries that occur in relation to the serving or selling of liquor at your holiday party.
While liquor liability insurance does cover a wide range of incidents, there are some things that it does not cover. It is important to understand that liquor liability insurance only covers third-party claims. If an intoxicated guest damages your property, your policy will not cover these damages. Liquor liability insurance also does not cover alcohol-related claims of various advertising injuries, such as defamation. Your policy will also not cover underage drinking.
How to Acquire Liquor Liability Insurance
If you are planning a holiday party, consider acquiring a comprehensive liquor liability insurance policy before the event to protect yourself against the various liabilities mentioned above. For more information about liquor liability insurance or to inquire about a liquor liability policy, contact the insurance experts at MFE Insurance today.