Liquor liability insurance 101

people cheersing at a party

When you’re planning a special event, be it a wedding, a retirement party, or a good-old-fashioned rager, you want to consider the different kinds of insurance you may need in case something goes wrong. As the host, you may have already taken out a special event liability insurance policy to protect yourself in the event that a guest is injured or has their property damaged.

When you envision everything that can go wrong at your event, some alcohol-related scenarios may come to mind. Did you know that your event insurance might not cover damages that result from alcohol you provided to your guests? For that, you may need liquor liability insurance. Below, our insurance professionals will explain exactly what this liquor policy entails.

What is liquor liability insurance coverage?

From anniversaries to art openings to corporate events, alcohol is a key part of many celebrations. However, serving alcohol can be risky. It’s your responsibility to bar underage drinking, and you also take on the risk that your legal-age guests drink too much and lose control, potentially hurting themselves or damaging property in the process.

Liquor liability insurance coverage is a kind of insurance designed to protect event hosts and small business owners from liability related to their guests’ or customers’ alcohol consumption.

Event hosts who plan on serving alcohol may want host liquor liability coverage to protect them from the financial liability related to their guests’ drinking.

Small business owners of bars, liquor stores, and restaurants that serve alcohol often need this kind of insurance. Some states’ dram shop laws can hold a bar or restaurant liable for a patron’s actions (like drunk driving) even after they leave the premises. Liquor liability insurance can help cover their liability in these instances.1

What does liquor liability insurance cover?

Liquor liability coverage is designed to protect event hosts and small business owners from a variety of potential liabilities when their guests consume alcohol. It can protect you in situations like the following:

Bodily injury

There’s an open bar at your event, and you know your guests might take full advantage of it. Should one of them overindulge and injure themself or another guest on the dance floor, you could be held liable.

3rd-party property damage

When alcohol is involved, people lose their coordination and become more prone to accidents. Should an intoxicated guest fall over and break something in the venue, you could be held liable for the damages.

Legal costs

People attend your event expecting to have a good time. They may become litigious if their property is ruined by a drunken guest. If the case goes to court, you could be held responsible for your own legal costs, even if you’re ultimately cleared of wrongdoing.

Medical costs

Should one of your guests suffer alcohol poisoning and require a trip to the ER, you could be held liable for their medical costs.

As an event host, you could find yourself personally liable in any of the above cases. Without liquor liability insurance, you may find yourself paying out expensive costs related to your guests’ behavior. With it, you may be able to avoid a costly payout—depending on the specifics of your policy and the circumstances of the incident.

What isn’t covered by liquor liability insurance?

While a liquor liability policy may protect you or your small business in cases of third-party injury, it usually has some exceptions. For example:

If you allow underage drinking, your liquor liability insurance policy might be void. When an underage guest who you have served alcohol injures themself or another person, or they damage property, your insurance may not be able to help.

If your personal or business property is damaged, your insurance might not help either. This type of liability insurance for liquor is designed to protect you from liability in the case of third-party damage, but it doesn’t protect your personal or business property. To protect your business property, you should consider taking out a commercial property policy.

If a guest is accused of libel and slander while drinking, that usually falls outside of the scope of liquor liability policy.2

Whether you’re an event host or a small business, it’s important to remain vigilant about underage drinking as well as take steps to protect your own property.

Doesn’t my insurance already cover that?

The short answer? Probably not. As an event host or small business owner, you may already have one of the following kinds of insurance policies:

Special event insurance to provide protection against third-party claims of bodily injury, medical costs, and property damage

General liability insurance to protect your small business in the face of client and third-party claims like the above

Professional liability insurance to protect your small business against claims of errors, omissions, or mistakes related to your services.

It’s recommended and even necessary to insure yourself with these policies. However, it’s also important to know that most policies contain an exception for bodily injury and property damage related to alcohol consumption.

That’s exactly why liquor liability insurance policies exist.

Don’t have the special event insurance or small business insurance you need to protect yourself from liability? Thimble makes it easier than ever to get insured. From our website or the Thimble app, you can take out a policy in under 60 seconds.

Our insurance is so affordable because it’s offered on-demand. Take out a policy for a one-hour event, a weekend-long festival, or pay for monthly coverage.

Three cheers for insurance

Are you planning a special event and realizing that your attendees’ fun may put your personal finances at risk? With liquor liability insurance, free yourself from worry. Remember:

  1. Liquor liability insurance can protect you against claims of third-party bodily injury and property damage related to their drinking, as well as legal and medical costs.
  2. It cannot help if your guests are underage, or if they damage your property. Take other steps to prevent these issues.
  3. Consider taking out special event insurance or small business insurance to protect you from additional risk.

If you opt in for this insurance policy, you can enjoy your event knowing you’re protected from liability. Cheers to that!


Our editorial content is intended for informational purposes only and is not written by a licensed insurance agent. Terms and conditions for rate and coverage may vary by class of business and state.

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