Last Updated: July 30, 2024
Liquor liability insurance protects businesses that sell, manufacture, or distribute alcohol. It mitigates or eliminates your financial responsibility if an alcohol-related accident occurs.
On the other hand, general liability insurance provides coverage for claims like bodily injury and property damage associated with your business. This kind of policy excludes claims related to selling or serving alcohol.
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.
What Does Liquor Liability Insurance Cover?
Bartenders and other alcohol-serving businesses can be held responsible if they accidentally serve a minor or a visibly intoxicated patron who then hurts somebody or causes property damage.
If your business is held liable for a liquor liability claim, your insurance can cover expenses like legal fees, medical bills, and repair costs.
Consider these scenarios:
- After having several drinks, an intoxicated customer starts a fistfight with another patron. One of them has a broken nose and requires medical care.
- An underage guest uses a fake ID and has multiple cocktails. They get behind the wheel and cause an accident in which the driver sustains major injuries.
- An attendee consumes six beers in less than two hours before leaving a networking event. They back their car into the venue’s deck, causing severe damage.
In these scenarios, the bartender, server, and venue are liable for the resulting expenses, but your liquor liability policy could absorb some or all of the cost.
What Does General Liability Insurance Cover?
General liability insurance covers third-party claims such as bodily injury and property damage. This insurance can pay some or all of your business’s financial responsibilities in the event of an accident unrelated to serving alcohol.
If a claim is not the result of an intoxicated customer or guest, your general liability insurance would be the policy that responds. 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 wasn’t the cause of any of these damages, your general liability policy would cover medical bills, judgments, court costs, and other related expenses.
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 insurance.
These policies cover different types of claims, and your business is at risk for both. In fact, most liquor liability policies require you to have a separate or existing general liability policy in place before you can get coverage.
Every business needs general liability insurance, however, most of these policies don’t cover alcohol-related claims. Liquor liability fills this gap so you’re covered from all angles.
Food Liability Insurance Program (FLIP) offers both general liability and liquor liability insurance for a wide range of food and beverage professionals, including bartenders, personal chefs, caterers, food trucks, and more.
Get a Free Quote for General and Liquor Liability Insurance
Whether you run a hot dog cart, a catering business, or something in between, FLIP offers coverage to fit your needs.
Safeguard your future today with general and 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 can purchase a liquor liability policy along with your general liability insurance.
How Much Does Liquor Liability Insurance 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
- Liquor Liability Event Policy: starts at $100
- General Liability + Liquor Liability Annual Policies: starts at $453
Final prices can also vary depending on where you operate, business revenue, and the limits you select.
Are There Any Exclusions in Liquor Liability Insurance Policies?
Liquor liability insurance 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 your policy guidelines:
- No liquor liability claims in the past 5 years
- No more than two fines or citations related to the sale or service of alcoholic beverages in the past 5 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
Can I Bundle Liquor Liability and General Liability Insurance?
Yes! FLIP offers a Platinum coverage option that includes both general and liquor liability insurance for a single premium.
Is Liquor Liability Insurance Required by Law?
Liquor liability insurance is not legally required anywhere in the US. However, it is illegal in most states for you to serve anybody under 21 or who is visibly intoxicated. You could be forced to pay fines, legal fees, and other expenses out of pocket without insurance.
