Tips for Business: Liquor Liability

This monthly insurance advice is brought to you by Chris Howlett at The Ambassador Group:

Liquor liability insurance is required for any business that manufactures, serves, sells or has a part in the purchase of alcohol. This insurance coverage is sometimes included in package policies. In other cases it might be required to purchase the coverage separately. The difference is usually determined by the total percentage of liquor receipts to total sales. Arizona laws create exceptionally high exposures for bars and restaurants. For example, if your bar serves a patron only one beer, it is possible that your establishment can be named in a lawsuit in the event of a claim. Even though another bar over-served the patron.

Liquor liability insurance policies should also include assault and battery, defense costs (legal fees), and employee drinking provisions. Since the market changes so regularly, it is wise to have quotes from multiple carriers. This will insure that your premiums are competitive and comprehensive. The limits in coverage in each of these categories may vary between each carrier.

Some carriers reserve the right to audit liquor receipts at the end of the policy term. Those premiums are estimated until audited. Over payments aren’t returned. If the estimate was too low the difference will be charged following the audit. Dave Delorenzo at The Ambassador Group has designed several programs that address the unique challenges surrounding liquor liability insurance in Arizona. It is a very complicated insurance coverage to correctly write. Don’t hesitate to ask Dave about your liquor liability questions.