Last Updated: 3/28/2025
Let’s face it: identifying which types of insurance you need for your business can be exhausting. You’ve probably been told you need a general liability policy, but what exactly does that cover?
If your business serves alcohol, you’ve likely heard about liquor liability insurance, too. But what is liquor liability insurance, and do you really need it if you have a general liability policy?
When you boil it down, here’s what sets these two popular policies apart:
| General Liability Insurance | Liquor Liability Insurance | |
|---|---|---|
|
What Does It Do? |
Provides coverage for claims like:
|
Adds coverage for alcohol-related claims like:
|
|
Does It Cover Alcohol-Related Claims? |
🚫 |
✅ |
There’s more to it than this, though. Let’s take a closer look at liquor liability coverage, how it differs from general liability insurance, and why some businesses need both so you can make an informed decision about your insurance needs.
What Is the Difference Between General and Liquor Liability Insurance?
General liability insurance covers third-party claims related to your business operations, while liquor liability only addresses incidents involving the service and sale of alcoholic beverages.
General and liquor liability insurance cover two different areas of risk for your business. It’s crucial to understand which claims these policies cover and the key differences that set them apart.
What Does Liquor Liability Insurance Cover?
Liquor liability coverage can protect bartenders and other alcohol-serving businesses from the costs associated with alcohol-related claims.
42 states and the District of Columbia have dram shop laws — civil laws designed to hold businesses, bartenders, and venues responsible for accidents or injuries caused by intoxicated patrons or service to underage patrons. Even if you live in a state without dram shop laws, someone can still sue you over damages caused by one of your intoxicated patrons.
You can be held liable to cover medical, legal, and property repair expenses stemming from a variety of alcohol-related scenarios, including:
- An underage guest at a wedding uses a fake ID and has multiple cocktails from the reception bar. They drive home and collide with another vehicle, causing serious injuries to the other driver.
- An attendee at a networking event drinks six beers in less than two hours before leaving a networking event. They back their car into the venue’s fence, destroying a section.
- An intoxicated customer starts a fistfight with another guest at a festival. The other guest sustains a broken nose and requires immediate medical care.*
These claims can be extremely costly, with some leading to million-dollar settlements. Liquor liability coverage is designed to absorb some or all of these expenses so alcohol-serving businesses don’t have to pay out of pocket and shut down over an accident.
*Requires assault & battery add-on coverage
Key Takeaway: A liquor liability policy covers alcohol-related third-party claims that businesses, bartenders, and venues are held liable to pay, whether by dram shop laws or a court ruling.
What Does General Liability Insurance Cover?
General liability insurance also covers third-party bodily injury and property damage, but only when these claims are not caused by alcohol. Unlike a liquor liability policy, this coverage is considered essential for all food and beverage businesses, whether they serve or sell alcohol or not.
If alcohol service is not the reason behind a third-party claim, general liability insurance could cover a claim. For example:
- A customer slips on a spilled drink near the bar and breaks their wrist
- A patron has an allergic reaction to the secret ingredient in your signature cocktail
- A customer gets food poisoning from garnishes that sat out too long
Since intoxication didn’t cause any of these damages, your general liability policy could cover medical bills, judgments, court costs, and other related expenses.
General liability insurance also includes personal and advertising injury coverage, which responds to claims involving how you advertise your goods or services. This includes libel, slander, defamation, and other claims that do not include physical harm or bodily injuries.
Key Takeaway: General liability insurance covers third-party bodily injury and property damage claims that are not alcohol-related or caused by an intoxicated customer. It is essential for all food and beverage businesses, even those that do not serve alcohol.
Who Needs Both General Liability and Liquor Liability Coverage?
If your business serves, sells, manufactures, or distributes alcohol, you need both general and liquor liability coverage.
While every business needs general liability insurance, alcohol-serving businesses also need a liquor liability policy to cover claims caused by intoxicated customers. Liquor liability fills a major gap in coverage to ensure you are protected from all angles.
Plus, most liquor liability policies require you to have an existing general liability policy in place before you can get coverage. Think of general liability as the foundation of your business’ insurance coverage and liquor liability as an additional layer of protection.
Businesses that need both general and liquor liability coverage include (but are not limited to):
- Bartenders
- Caterers who serve alcohol
- Food trucks that serve alcohol
- Personal chefs who serve alcohol
How Can I Get General and Liquor Liability Insurance?
Food Liability Insurance Program (FLIP) makes it easy for food and beverage businesses to get general and liquor liability insurance in one convenient place. Bundle both coverages starting at just $37.75 per month or $453 per year.
This may seem like yet another expense for your business, but when you consider how liquor liability claims can cost you thousands, if not millions, of dollars and force you to close your business, the choice is clear.
If you only occasionally serve alcohol and don’t need annual coverage, our event policy provides general and liquor liability coverage starting at $150 per event. This short-term policy offers up to three consecutive days of coverage — perfect for protecting your business during setup and teardown or during multi-day events.
Safeguard your business’ future today with comprehensive general and affordable liquor liability insurance from FLIP!
FAQs About Liquor Liability vs. General Liability
Can General Liability Insurance Be Extended to Cover Alcohol-Related Incidents?
No, a general liability policy excludes claims related to selling or serving alcohol. If you need coverage for alcohol-related claims, you must purchase a liquor liability policy along with your general liability insurance.
How Much Does Liquor Liability Coverage Cost Compared to General Liability Insurance?
FLIP’s base general liability insurance policy starts at $25.92 a month or $299 a year. Liquor liability pricing depends on which policy you choose and how long you need it:
- Liquor Liability Annual Policy: starts at $300 per year
- Liquor Liability Event Policy: starts at $100 per event
- General Liability + Liquor Liability Annual Policies: starts at $37.75 per month or $453 per year
Final prices can vary depending on where you operate, your business’ revenue, and the limits you select.
Are There Any Exclusions in Liquor Liability Policies?
A liquor liability policy will not cover claims that qualify under other coverage types, including general liability. It will only cover alcohol-related claims.
Your coverage could also be void if you don’t follow these policy guidelines:
- No liquor liability claims in the past five years
- No more than two fines or citations related to the sale or service of alcoholic beverages in the past five years
- Neither you nor anyone with controlling interest has filed for bankruptcy in the last 12 months
- You have a general liability policy with limits equal to or higher than the liquor liability limits
- You have an active liquor license before selling or distributing any alcoholic beverages
- Your business has an enforced written policy and procedure that prohibits the consumption of alcohol while working
- Your business does not allow anybody other than you and authorized employees to serve alcohol
Is Liquor Liability Coverage Required by Law?
Liquor liability coverage is not federally required in the U.S., but many states and local governments require it for any business selling or serving alcohol. These governments often ask for proof of liquor liability coverage before issuing a liquor license.
Outside of the law, you may be required to carry this coverage by:
- Venue managers
- Landlords
- Event organizers
- Clients
Is a Host Liquor Policy a Substitute for Liquor Liability Coverage?
No, host liquor insurance is not designed for businesses that sell, serve, or provide alcohol as part of their regular business operations. It is meant to cover people hosting a one-time event where alcohol is served, such as a birthday party, from the cost of alcohol-related incidents.
Host liquor liability insurance does not cover people in the business of selling alcohol — only a liquor liability policy can do that.
Alex Hastings
Seattle-based copywriter and (WA) licensed insurance agent Alex Hastings leverages her experience as a lover of fast-casual food, baked goods, and iced oat milk lattes. She holds a B.A. in Creative Writing from Western Washington University. Before working at Veracity, she was a retail copywriter at Zulily and an English language teacher in South Korea. Alex is fully trained on FLIP insurance coverages and writes content that connects food and beverage business owners with the policies they need.
Seattle-based copywriter and (WA) licensed insurance agent Alex Hastings leverages her experience as a lover of fast-casual food, baked goods, and iced oat milk lattes. She holds a B.A. in Creative Writing from Western Washington University. Before working at Veracity, she was a retail copywriter at Zulily and an English language teacher in South Korea. Alex is fully trained on FLIP insurance coverages and writes content that connects food and beverage business owners with the policies they need.
