How to Know if Your Restaurant Needs Liquor Liability Insurance
By Pekin Insurance · May 20, 2019 ·2 min read
It’s tough to beat these pairings: beer with burgers, red wine with pasta, and bourbon with barbecue.
Still, your staff needs to exercise caution when it comes to serving alcohol. Your restaurant could be sued if an intoxicated customer causes damages or injuries!
Do you know how liquor liability insurance could help your restaurant through tough situations? How do you find out if you should have this coverage?
Continue reading to discover how liquor liability insurance works, and you'll be one step closer to seeing if your restaurant needs it.
Who Needs Liquor Liability Insurance?
You need liquor liability insurance if your restaurant:
- Sells alcohol.
- Distributes alcohol.
- Serves alcohol at an event.
- Allows customers to bring alcohol and drink it.
Liquor liability insurance is designed to cover legal fees, medical costs, and settlements after an intoxicated customer:
- Fights with customers at your restaurant.
- Causes damages while driving drunk.
- Sexually harasses other customers.
- Slips, trips, or falls on your premises.
What Are Dram Shop Laws?
Dram shop laws hold establishments liable when a drunk customer causes injuries, destruction of property, and even death. These “establishments” include bars, breweries, nightclubs, restaurants, and more.
This is who could also be sued:
- Bartenders, the waitstaff, and anyone who serves alcohol at a restaurant.
- Restaurants that host social events and company parties.
- Organizations, including nonprofits, that host parties.
The plaintiff in a dram shop case needs to prove a restaurant employee was negligent by serving someone:
- Who was clearly intoxicated.
- Who could reasonably become intoxicated from the amount served.
- Without asking for identification or proof of age.
- After the establishment closed.
Dram shop laws vary from state to state, so talk to a legal professional and your insurance agent for more details.
What Does Host Liquor Insurance Cover?
Host liquor insurance and liquor liability insurance cover similar damages. There's a major difference between the two, though.
Host liquor insurance covers potential damages from serving alcohol at parties, corporate events, weddings, and more. Host liquor insurance is short-term coverage for an event, and liquor liability insurance is long-term coverage for your main location.
Are There Ways to Prevent Liquor Liability Damages?
Thankfully, you have tools to educate your staff and help protect your restaurant from liquor liability damages.
1. Give your waitstaff and bartenders alcohol server training.
Some states require restaurant employees to earn a license before they serve alcohol.
Most alcohol server programs cover these topics:
- Knowing how and when to refuse sales.
- Recognizing when a customer has had too much to drink.
- State laws that affect alcohol sales and service.
- Knowing how and when to check IDs.
2. Follow a defined pour policy.
You have a variety of pour spouts to pick from, including a digital version that measures how much is poured. It’s a great way to control inventory and prevent potential losses.
No matter what tools you use, overpouring is a threat to your bottom line. It reduces your per-drink profit and could cause customers to become intoxicated more quickly.
3. Discourage intoxication.
There are tasteful ways to tell customers they’ve had enough. When you do this, you look out for their well-being and the long-term success of your restaurant.
4. Encourage customers to use Uber, Lyft, or a taxi company.
There's no excuse for drinking and driver. Ridesharing services are everywhere.
Post signs encouraging customers to use Uber, Lyft, or a local taxi company.
Pekin Insurance offers much more than liquor liability insurance.
Contact your local, licensed Pekin Insurance agent to put the right business insurance plan in place for your restaurant.