The Liquor Liability Insurance Policy is designed to pay damages that the insured is legally obligated to pay for an “injury” arising out of the insured’s business of selling, serving or furnishing alcoholic beverages.
Important things that you need to know about Liquor Liability Insurance:
Liquor liability is excluded by the commercial general liability policy for organizations that are in the business of manufacturing, selling, distributing, serving or furnishing alcoholic beverages.
A patron being involved in an automobile accident after consuming alcoholic beverages at the named insured’s premises would fall under the liquor liability coverage. However, a patron that causes a fight on the premises may or may not be clearly covered. It is possible that the fight resulted from the insured’s negligent security operations. In this case, the claim may be addressed by the insured’s general liability policy as well as the liquor liability. It is important, where applicable, to have both lines of coverage with the same insurance carrier.
Some liquor liability policies are designed only for a specific state statute while others are designed to cover both statutory and common law liability.
The liquor liability policy will not respond to any claim arising out of any alcoholic beverage sold, served or furnished while any required license is not in effect. If the liquor license has expired and has not been renewed, there will be no coverage.
One of the primary exposures of establishments that sell, serve or furnish alcoholic beverages is responsibility for altercations that occur on the premises. Therefore, a liquor liability policy with an assault and battery exclusion would defeat the purpose of buying the insurance. These policies must be read carefully and reviewed by an insurance professional.