Conducting business involving the service or sale of alcohol carries distinct and important responsibilities. By failing to take liquor liability insurance, you subject your business to financial, legal, and reputational damage. Here are a few risks associated with not having this insurance:
Legal Exposure
If a business serves alcohol, it should take responsibility for managing the intoxication of their patrons. In some cases, your business may be sued if a customer causes damage after becoming overly intoxicated on your premises. This type of insurance is available in states that have Dram Shop statutes. These laws impose liability on alcohol vendors for damage or injury resulting from intoxicated patrons.
If a court finds your business liable, you might be ordered to pay damages, settlements, or restitution. Business owners may face lawsuits as a result of different occurrences. A patron who leaves your premises and is involved in a catastrophic vehicle accident could lead to lawsuits from injured parties or their family members. If a fight occurs due to overconsumption and someone gets hurt, your business could be liable for over-serving the patrons involved. In such cases, the liability insurance covers legal defense costs and damage awards.
Challenges With Licenses and Contracts
Liquor liability insurance is a key part of staying compliant with local laws and regulations. This insurance may be a prerequisite for obtaining or renewing a liquor license in many states and municipalities. Working without this protection can compromise your license, and your business may be subject to penalties, fines, or suspension of your alcoholic beverage license if found with inadequate or a lack of insurance.
Venues that host events, property owners leasing commercial spaces, and event organizers typically require proof before engaging in a contract agreeing to work with businesses that serve alcohol. Without coverage, you may miss out on lucrative opportunities to cater events, host private parties, or expand into new locations.
This limitation hinders growth and makes it harder to compete in a crowded market. Being uninsured can also sour relationships with vendors, partners, or potential investors who use coverage as a sign of professionalism and risk management. Without it, your business may be perceived as a risk.
No Protection for Employee Errors
In a busy, high-pressure environment, employees may make errors. Without the protection of liquor liability insurance, the results of an employee’s mistake can negatively impact the business. When a misstep results in litigation, property, or bodily harm, your business will be subject to paying the restitution. Responsible service training, a strict alcohol policy, and vigilant management will go hand-in-hand with insurance to help mitigate risk.
It’s easy to misjudge how much a patron has consumed or how alcohol is affecting them, as a person’s perception of intoxication can often be inaccurate. Dram shop insurance acknowledges this reality and provides a crucial safety net. You give yourself the resources to deal with the unfortunate incident calmly and effectively without risking your financial future.
Get Liquor Liability Insurance Today
Don’t wait for a costly incident to highlight the need for liquor liability insurance. If you are a business that serves or sells alcohol, take time to evaluate your risk and secure coverage today. Contact a reliable insurance specialist to help you shop options customized to the needs of your business.
