Liquor Liability
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Product Summary
A Liquor Liability policy covers the legal liability imposed on a business that sells, distributes or serves alcoholic beverages. General Liability policies exclude Liquor Liability for establishments that sell, distribute or serve liquor, so those businesses need a separate Liquor Liability policy or coverage form. The types of businesses that should carry Liquor Liability include bars, restaurants, hotels, motels, liquor stores, convenience and grocery stores that sell liquor. The coverage is available on either an "Occurrence" form or a "Claims-Made" form.
What's Covered?
A Liquor Liability policy covers claims involving bodily injury and property damages that the insured is legally obligated to pay. The policy covers only injuries or damages an insured has caused due to serving, selling or distributing alcoholic beverages, so a General Liability policy is also required to cover the other exposures of the business. The policy covers attorneys' fees and other costs associated with defending against a lawsuit. An important optional coverage to consider on a Liquor Liability policy is Assault and Battery coverage.
What Isn't Covered?
If a liquor license is required and is not in effect at the time of an otherwise covered liquor liability exposure, there is no coverage. Common exclusions on a Liquor Liability policy include Workers' Compensation and Products Liability from any product other than liquor (e.g., food).
What Affects the Cost of the Policy?
The premium is based on a variety of factors, depending on the types of coverage forms included in the policy. A tavern that is open past midnight will generally have a higher premium than a restaurant that sells only a small amount of liquor.