"In wine there is wisdom, in beer there is Freedom, in water there is bacteria."
- Benjamin Franklin
If your business sells, serves or distributes alcohols then Liquor Liability Insurance should be an essential piece of your overall Risk Management plan. While your General Liability policy will most often provide some "host" liquor liability protection, this policy contains an exclusion if you are in the business of making, distributing, selling or furnishing alcoholic beverages. In fact, even individuals throwing a party at their house have a liquor liability exposure, although most homeowners' policies will pick this up under their Personal Liability coverage (assuming the guests weren't charged for this alcohol).
So, what is your business's exposure to a Liquor Liability Claim? This is a bit complicated as it depends on the State that your business is located in & that state's "Dram Shop Laws".
Every state has a different Dram Shop Law (ie the liability of a business that furnishes alcohol) - you can find a state-by-state breakdown here. Specifically in California, the dram shop laws significantly limit the civil liability of third parties in alcohol-related incidents. CA law states that alcohol related injuries are caused by the consumption of alcohol by an intoxicated person, and not by the sale of alcohol to that person. This means that the person who chose to drink alcohol is liable for all damages he or she causes while intoxicated.
HOWEVER - there is still a very real exposure to some costly liquor liability claims for California businesses.
Some examples of these types of claims are below:
Alcohol served to a minor who left the restaurant & then hurts another individual in a car wreck on their way home. The minor's parents & individual that was hurt file a $750k lawsuit against the restaurant due to them serving a minor that contributed towards the injury of a third party. The restaurant would be liable (including potentially a criminal suit against the owner of the restaurant & the person serving the minor) & the dram shop laws wouldn't apply in this situation since the establishment served alcohol to a minor. This is covered by the Liquor liability policy (except for the criminal suit as insurance is not meant for intentional illegal acts).
At a local craft brewery, a business owner & employee have to escort an obnoxious drunken individual out of their establishment. That drunken individual falls down while being escorted out of the establishment & cracks their head open. They file a $200k lawsuit against the brewery, the owner & the employee for medical costs, emotional distress & loss of income due to the inability to work while recovering from this head trauma. This is covered by the Assault & Battery coverage section of their Liquor Liability policy.
A fist fight breaks out at a local dive bar between an individual & his ex-girlfriend's new boyfriend. That individual & 2 other people who are trying to break up the fight get seriously hurt. They all sue the dive bar, including naming the owners personally in the lawsuit. There is a $300k settlement, not including another $100k in legal fees, for not providing a safe environment. This is covered by the Assault & Battery coverage section of the Liquor Liability Insurance policy.
A patron is mugged while sipping a glass of wine at the outdoor seating area of a local Wine Bar. The patron isn't "physically hurt" but had to give up their wallet, all of their money & suffers from emotional distress for many years as a result of this encounter. The patron sues the establishment for $150k not providing a safe environment. This is covered by the Assault & Battery coverage section of the Liquor Liability Insurance policy.
Please reach out to SBW Insurance today if you feel like your business has a Liquor Liability exposure. Some of the most common businesses that need Liquor Liability insurance include Bars & Taverns, Restaurants, Craft Breweries, Wineries, Distilleries, Comedy Clubs & Wedding & Banquet Sites