What Is Liquor Liability?
Liquor liability is your business’s responsibility to cover losses, damages, or other expenses arising from the injury or death of a person or damage to property where alcohol that you served to one of your customers is deemed to be a contributing factor.
How Can Liquor Liability Insurance Protect Your Business?
Liquor liability insurance protects businesses that manufacture, serve, distribute, or sell alcohol, including restaurants, bars, pubs, breweries, cafes, grocery stores, and convenience stores.
This type of policy covers costs associated with claims against your establishment alleging third-party bodily injury or property damage due to an intoxicated patron. If one of your customers becomes intoxicated at your establishment and injures themselves or others, you or your employees may be liable.
5 Ways to Reduce Your Liquor Liability Risks and Insurance Premium
Holiday and year-end parties typically involve customers imbibing alcohol. You and your staff have a legal responsibility to make sure your guests get home safely. That’s where your business’s liquor liability risk comes into play. It’s essential to have adequate liquor liability coverage as part of your overall restaurant insurance or bar and pub insurance policy.
A general rule to keep your insurance premium reasonable is ensuring that no more than 40% of your sales derive from selling alcohol. Here are five ways to mitigate your liquor liability risks:
1. Limit your customers’ alcohol consumption, offer food service, and do not serve patrons past the point of intoxication.
2. Train your employees and document their training. They must be licensed to serve alcohol by provincial liquor service and sales programs such as Smart Serve in Ontario or ProServe in Alberta. Don’t permit them to serve alcohol to intoxicated individuals; ensure they know what to do if a customer has too much to drink.
3. Remind your customers not to drink and drive and provide them with options to get home safely, such as hailing them a taxi or ridesharing service.
4. Display posters from Mothers Against Drunk Driving (MADD) Canada wherever alcohol is served.
5. Implement a mandatory customer identification policy and never serve alcohol to anyone under the legal age in your province.
Taking these precautions and talking to a licensed Zensurance broker about reviewing your existing policy may help reduce your annual premium.
Our insurance experts can help identify gaps in your coverage and shop our partner network of more than 50 insurance providers to see if they can get you a better rate. Above all, a broker can make sure you’re not underinsured. A single third-party liquor liability lawsuit could bankrupt you if you lack adequate insurance protection.