Liquor liability insurance

Alcohol and accidents go hand-in-hand. Regardless of whether you’re planning a sophisticated black-tie event or a techno-fueled rager, you can’t sweep the possibility of broken tables (or noses) under the rug. With liquor liability insurance, you can get reliable protection for any type of party.

Liquor liability insurance provides protection from the financial consequences of damages incurred because of alcohol consumption at an event. Thimble includes this coverage in many special event insurance policies if guests have brought their own alcohol. (Note: If alcohol is being sold at your event, you will likely need additional coverage. We’ll explain that below.)

Read on as we explore liquor liability insurance, so you understand what kind of coverage you need before you welcome your first guest.

Do you need liquor liability insurance?

If there is alcohol at your event, then, yes, you need liquor liability insurance. And that holds true even in cases when guests are drinking their own alcohol at your event or you make free drinks available to guests (because you’re an absolute hero). This may come as a surprise to some, but even if someone else is responsible for breaking property or injuring another person, you — as the host who allowed alcohol consumption — could be liable.

In other words, liquor liability insurance will help to make sure you’re covered even when unexpected situations arise, which may not be in your control, even at an event where alcohol is available but is not being sold.

What does liquor liability insurance cover?

Liquor liability insurance is designed to protect event hosts and small business owners from the financial consequences arising out of various potential liabilities that result from their guests consuming alcohol on their premises or at their gatherings.

People attend your event expecting to have a good time. So, if a drunken guest ruins their expensive new handbag or a fancy new jacket, they may want more than an apology. If the case goes to court, your liquor liability insurance can provide you with an investigation and defense of claims stemming from alcohol-related incidents. It can also protect you if someone brings an unfounded claim against you.

Here are a few all-too-possible situations where liquor liability insurance can cover you from damages arising from:

• Bodily injury (non-employees): If someone at the company holiday party enjoys the open bar too much and needs a trip to the ER to deal with alcohol poisoning from sambuca shots, you could be held liable for the injured party’s damages. Similarly, if anyone overindulges and injures themself or hip checks another guest on the dance floor, you could be held liable.
• Third-party property damage: When alcohol is involved, people lose their coordination and become more prone to accidents. Some people may believe their dancing gets better with tequila, but if an intoxicated guest brings a new meaning to the word “breakdancing,” you could be held liable for the damages to the property they destroy.

What isn’t covered by liquor liability insurance?

Thimble’s special event insurance includes liquor liability coverage, provided that you are not in the business of manufacturing, distributing, or selling alcohol.

However, many policies contain an exclusion for bodily injury and property damage if the incident is related to alcohol consumption—and that’s exactly why liquor liability insurance exists.

That being said, this type of insurance is not an invincibility shield or a license to throw the rulebook out the window and holds a no-holds-barred boozefest.

While liquor liability insurance 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 might not apply. When an underage guest to whom you have served alcohol injures themself or another person or they damage property, your insurance may not be able to help.
• If your own personal or business property is damaged, your liability insurance won’t help either. Liquor liability insurance 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 buying commercial property coverage as well as business equipment protection.

What if you’re selling alcohol at your event?

Imagine you host a small concert with some local bands playing, and you’re running a cash bar. You might think everything is fine because it’s in your backyard and you’ve known the guitarist since you were 10 years old. But the truth is that you aren’t covered if your generous house pours cause one of the musicians to tumble off the stage or if one of the guests has a mishap with a tiki torch.

If alcohol is being sold at your event—even for a private party at your home—you will likely need additional coverage, which you can choose to purchase for a fee.

If you’ve hired a third-party vendor to sell alcohol at your event, you need to make sure they have liquor liability coverage that covers businesses that make, serve, or sell alcohol.

Also make sure that they add you as an Additional Insured on their policy so that their coverage extends to you.

How you can minimize the chance of claims

While any of the scenarios above could happen to anyone, you can take certain steps to manage your risk exposure. In doing so, you’ll reduce the chances of claims.

Here are a few tips:

• Hire reputable vendors: You can avoid some incidents by using licensed event staff and trained servers who can screen for underage drinkers and who also have experience handling crowds and intoxicated people at large events.
• Use a cash bar: Guests are less likely to drink in excess when they have to pay for drinks. (Keep in mind that if you want to sell alcohol, you should consider an additional layer of coverage that costs extra.)
• Ban hard liquor: By only serving wine and beer, you can safeguard against the chaos likely to ensue had the party animals been permitted to break out the Jager Bombs.
• Offer a shuttle bus service: If you can afford to ferry guests home after the event, it will reduce the likelihood of drunk driving.

Can you get one-day liquor liability insurance?

Yes, you can! With Thimble, you can get event coverage, including liquor liability, for events lasting from just one day up to two weeks. And so, this is an excellent choice for weddings, retirement parties, mini-festivals, and corporate retreats.

You can use the Thimble app or website to get insured in less than 60 seconds. Also, you can cancel your policy up to an hour before the policy starts for a full refund. Drop us your email below and we’ll let you know when event coverage is available near you.

How much does liquor liability insurance cost?

Your cost will vary depending on the location, the type of event, number of guests, and event hazards. With Thimble, liquor liability insurance is provided with your special event insurance. And, as mentioned already, if you’re selling alcohol, you’ll need to purchase additional liquor liability.

Recent industry research on the leading insurance companies indicates that the average price for liquor liability insurance ranges between $125-400 for one-day events.sup 1However, you can get event insurance via Thimble for as little as $115.

Raise a glass for liquor liability insurance

With alcohol, even the most civilized crowds can become hard to control. When the drinks start flowing—especially at an open bar—a slip on the dancefloor or broken furniture becomes a real possibility.

Liquor liability insurance provides the legal defense and investigation of claims as well as protection against the financial consequences of claims for bodily injury and property damage from third parties. This type of insurance will ease your worries for serving alcohol at your events, and you can add additional coverage if you want to sell alcohol.

Liquor liability insurance will give you peace of mind so you can enjoy your special event knowing you’re protected from any boozy bedlam. Cheers to that!

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Source: 

1. The Cost Guys. Average Cost of Special Events Insurance.