Every holiday season, the number of alcohol-related accidents spike across the country. Last year, twenty-two people were charged with driving under the influence between Christmas and New Year’s Eve in the GTA alone. If you are a bar or restaurant owner, you’re probably familiar with the influx of drinking during the holidays. With the holiday season in full swing, now is the time to ensure you protect your business by adding liquor liability coverage to your restaurant insurance policy package.
How Does Liquor Liability Insurance Protect My Restaurant?
Liquor liability coverage is a policy you can add to your restaurant insurance, which covers the costs associated with claims alleging bodily injury or property damage due to an intoxicated person. If the person became intoxicated, or the incident occurred at your restaurant, you or your employees may be held liable.
Liquor liability coverage also covers the medical expenses and any mandatory judgments that result from a lawsuit and includes coverage for employees who become intoxicated on the job (holiday parties, it happens).
Regardless of if you are serving liquor as part of a special event or it is part of your day-to-day service, consider adding a liquor liability coverage to your restaurant insurance.
Do I Need Restaurant Insurance Too?
When it comes to insurance, the rule of thumb is to overestimate how much coverage you need. When liquor is involved, accidents may be more likely to occur. When adding liquor liability coverage to your insurance package, take the opportunity to revisit what insurance you currently have in place to protect your restaurant.
In addition to liquor liability coverage, a comprehensive restaurant insurance package should include:
- Commercial General Liability (CGL) is a primary type of insurance that is like liquor liability insurance without the liquor. CGL provides financial coverage for claims alleging bodily injury and property damage due to your business operations.
- Product Liability Insurance provides coverage for bodily injury or property damage due to your product – in this case, food and beverage. If a patron can prove your holiday food special made them sick, you could find yourself on the wrong end of a lawsuit.
- Commercial Property Insurance provides financial coverage for loss or damage to your property caused by an external event, such as fire, theft, or vandalism. An additional form of coverage to add to your commercial property insurance is Equipment Breakdown Insurance, which covers the cost to repair or replace equipment that has broken down due to an internal cause, such as an electrical or mechanical issue.
- Business Interruption Insurance covers net income loss if you need to close your business due to a disaster temporarily. In addition to income lost during the time it takes to restore your business to a working state, your employee’s wages and overhead costs, such as electricity and rent, may also be covered.
How Do I Reduce The Risk of A Liquor Liability Claim?
While you can’t always control how much your patrons drink, there are steps you can take to ensure both you and your patrons are safe over the holidays:
Train Your Employees
Education is one of the most significant forms of prevention. To serve liquor, your employees must have the appropriate license and certification (e.g., Ontario SMART Service). Still, to ensure your entire staff is on the same page when it comes to monitoring patrons, consider including liquor liability training in their onboarding training.
Ensure your bartenders and waitstaff can identify signs of intoxication and know what to do if a patron has too much to drink. Employee education could include training on how to:
- Monitor Alcohol Consumption: Training your staff on techniques to identify and monitor patrons who are close to intoxication could mean the difference between an accident occurring.
- Offer Continued Service: If you have a patron who needs to sober up before they head home or who looks like they’re getting close to intoxicated, instruct your staff to offer continued service by suggesting food specials or offering a non-alcoholic beverage.
- Deny Continued Service: If a member of your bar staff needs to deny a patron service, make sure they feel confident and comfortable doing so, or if that means involving another member of the team, knowing who to include.
See Your Patrons Get Home Safe
Every day, an average of four Canadians die in a drunk driving accident. Your job doesn’t end after your patrons leave. As a licensed establishment, you and your staff have a legal responsibility to make sure your patrons get home safely. You may be legally liable if your patron is injured or causes injury after becoming intoxicated at your restaurant or bar.
If you have a patron who is struggling to get home safely, suggest they take an Uber or Lyft or see if your city has an Operation Red Nose program, which sends volunteers to help motorists and their vehicles get home safely.
How Much Does It Cost To Add Liquor Liability To My Restaurant Insurance?
Just like any insurance, the cost of adding liquor liability coverage to your restaurant insurance package varies based on several factors, including the type of establishment and alcoholic beverages sold and hours of operation. The best indicator of how much it will cost to add a liquor liability coverage to your insurance package is the percentage of your income that comes from selling alcohol, as this relates to your exposure to risk.
The holidays can be stressful, but insurance doesn’t have to be. Your restaurant insurance policy should cover you from all angles.
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