Alcoholic Beverage Liability Insurance

What Does Alcoholic Beverage Liability Insurance Mean?

Alcoholic beverage liability insurance protects owners of restaurants, bars, clubs, catering companies, and other establishments that sell or serve alcoholic drinks from liabilities arising from damages or injuries caused to third parties by their intoxicated customers. It is often sold under the name liquor liability insurance, and in most states any business with a license to sell alcohol is required to carry it.

Insuranceopedia Explains Alcoholic Beverage Liability Insurance

Alcoholic beverage liability insurance protects a business from having to pay thousands of dollars in lawsuits, medical expenses, and property damage costs that may be legally required due to the actions of an intoxicated patron.

For example, if a man becomes intoxicated at a bar, drives a car, and injures a pedestrian, and the injured person sues the bar and wins, the insurance company will cover the damages to the injured party, along with the litigation and other legal expenses associated with the lawsuit. This is why this coverage usually sits inside a wider package of bar insurance or the broader set of policies covering what insurance a restaurant needs to operate.