Liquor liability insurance, known as Dram Shop insurance will protect you from claims that could put you out of business. In most instances, Arizona will require Liquor Liability Insurance by law. In Arizona, a business owner could be held liable if an employee sold alcohol to an individual who was obviously intoxicated or a minor.
If your business includes serving alcohol, it’s not only usually required probably a good idea to get coverage. It is your most likely cause of loss and your most severe form of loss.
What is Liquor Liability Coverage?
Usually added on as a coverage endorsement, Liquor Liability Insurance protects businesses that make, sell, or serve alcohol. It protects you from claims that occur as a result of purchasers drinking too much. This form of insurance is also called Dram Shop Insurance which states that any enterprise that overserves liquor (i.e. Serves liquor to a client who is already intoxicated) may be held strictly accountable to absolutely everyone harmed. These claims are more commonplace than you might think and they could do serious damage to your business.
In 2013, a jury in Texas held a local bar accountable for more than $18 million for overserving a client who then got into his car and ended up killing an 18-year old in a head-on collision. And this year a person in Bend, Oregon sued a nearby bar for $2.6 million for overserving him. He claims that the servers allowed him to get so drunk that he was not able to resist stepping into a fight together with his friend which ended in him sustaining a damaged neck, fractured skull, and permanent brain damage.
There has been quite a bit of confusion about the need for liquor liability coverage even among insurance professionals. Liquor Liability legal guidelines vary substantially by State. Be sure to review state statutes for getting a liquor license and meeting the required limits.
What does Liquor Liability Insurance Not Cover?
The best way to find out what is covered by a policy is often by finding out what it does not cover. Review policies carefully, because many of them have conditions, exceptions, limitations, or restrictions not shown below:
• Expected or Intended Injury – Coverage does not apply to injury that is either expected or intended by the insured with an exception for reasonable force while protecting your property.
What sorts of businesses want Dram Shop insurance Coverage?
If you run a bar, liquor store, or restaurant that serves alcohol, you need liquor liability insurance coverage in Arizona.
But there are other sorts of groups that might not even know they need liquor liability coverage. For instance, it is not unusual for service industry businesses such as hair salons, nail salons, barbershops, and spas to serve complimentary beer, wine and/or cocktails as a perk for their clients. Alcohol is also not unusual at pop-up events, art gallery exhibits, and grand openings. And even as it might appear unlikely for a client in this form of business to sustain a loss, it is possible. And where alcohol is present, intoxication is constantly a possibility. Just one irresponsible server or patron could turn out to be costing you the livelihood you’ve worked so hard to build.
How Much Does Liquor Liability Insurance Can Cost?
$38 to $90/month – the average price of a standard $1,000,000/$2,000,000 Liquor Liability Insurance policy for small businesses that serve alcohol. It based on location, cost of drinks, hours opened, payroll, sales, and of course experience.
Liquor Liability Insurance Risks And Underwriting Considerations
Knowing what underwriters are reviewing can help you get the best pricing. Concentrate on issues that will affect your bottom line. Following are underwriting considerations for liquor liability insurance:
Be clear on which of the following categories would be involved in your business to make sure you are covered properly and at the best price:
- Distributing and wholesaling
- Off-premises consumption only-beer and wine
- Off-premises consumption only-beer, wine, and spirits
- On-premises consumption-beer and wine
- On-premises consumption-beer, wine, and spirits
- Special events licenses
So again, if you own a commercial enterprise that serves alcohol in any capacity, you need this protection.
Call us! Our agency and agents licensed by the Arizona Department of Insurance, let us help you construct the perfect plan for your insurance needs.
Also learn about Arizona small business insurance requirements for general liability, commercial property, commercial auto, workers compensation, and other types of insurances for small businesses.
Where to buy Arizona Liquor Licence https://www.liquorlicense.com/arizona/
FAQ answered by Arizona Department of Liquor
The “Mast have ” book, intended to accurately present liquor-related statutes and rules offered as a courtesy to the public by the Stae of Arizona Department of Liquor Licenses and Control.