Significance of liquor insurance

A bar owner can be held liable for damages caused by a drunken patron.  Liquor insurance policies protect the owner in these instances.

Image credit: luchschen / 123RF Stock Photo 

Bar and tavern owners, like the owners of any business, are wise to protect their investments and cash reserves by carrying sufficient insurance coverage.  This is true regardless of how large the bar or tavern is. How many customers it usually serves and how much profit it makes.

A number of different areas of insurance coverage exist to help protect bar owners including non-owned and hired auto; workers compensation; loss of income; signage; money and securities; property contents; and general liability/assault and battery.  These are all essential, but none is more important than liquor insurance, also referred to as liquor liability.

Because of unique state laws, a bar or tavern owner – or the owner of a restaurant that serves alcohol to its customers – can be held liable in certain events resulting from over-intoxication.  If a patron drinking in a bar, for example, becomes tight and starts a fight with another patron and that patron is severely injured, the owner of the bar may be held responsible for the injured person’s medical expenses and other damages.

Owners of establishments that serve alcohol can also be liable for damages, an intoxicated patron causes off the property.  For example, if the bartender continues to allow a person to become more and more intoxicated, and that person then gets in a car and runs it into a school bus full of kids, the ensuing inquiry will turn up that the driver had been drinking to excess in the bar.

In court, the judge or a jury will need to verify all who were at fault for the accident as well as the amount of damages to be awarded based on the extent of injuries to children.  The drunk driver, of course, will probably end up with an extremely high level of financial responsibility (particularly if the case goes to civil court after criminal court), and he or she will probably be facing jail time.

But the owner of the bar can also be found liable for contributing to the accident, and the judge’s or jury’s award to the plaintiffs can be astronomically high and immediately put the owner out of business.  This is why liquor insurance cannot be overlooked.

It wasn’t the direct fault of the bar owner that a patron got drunk and ran into a school bus.  But courts often don’t care if the offence were direct or indirect.  In this case, the tragedy is real and cannot be reversed, but liquor insurance will at least cover damages and let the bar owner to stay in business.

In summary, liquor insurance protects the owners of establishments that sell alcohol against a variety of liabilities that can arise when customers get over-intoxicated.  No bar or tavern owner should operate without full liquor liability insurance.

About the author-

Paul is a freelance writer associated with Hartzell Insurance Associates, a Hatfield, Pa.-based firm specializing in liquor.