Any business that serves customers should be protected by a general liability insurance policy. This type of coverage typically includes standard liabilities such as on-site injuries, property damage, and other potential incidents that may arise from daily operations. Although this kind of policy is designed to offer broad coverage, it may not be enough for establishments that serve alcohol. Liquor liability insurance is likely a necessity for such businesses. Is liquor liability included in general liability coverage, and what is the difference between liquor liability and general liability? Consider the following four factors to better understand liquor liability insurance, learn about its benefits, and find the answers to these questions.
Liquor liability is typically a separate policy from a general liability policy - so, no, it is not included in existing general liability coverage. One of the major differences between these two types of insurance is the scope of coverage that each provides. While general liability is intended for the hazards of operating a business, liquor liability is tailored to cover the specific risks associated with serving alcohol to patrons. It thus offers a more niche scope of coverage.
In addition to different scopes of coverage, general liability and liquor liability policies typically have different requirements, too. While general liability coverage usually is not legally required, liquor liability coverage typically is in states that have dram shop laws. Dram shop laws are designed to police businesses that serve alcohol. More specifically, they allow victims of alcohol-related damages to hold the serving establishment responsible for their losses. In states with such laws, liquor liability insurance is a necessity - and often a requirement, too.
General liability insurance and liquor liability insurance are also different in the scope of individuals who are covered. A general liability insurance policy might not protect patrons from the actions of another patron, for example. A liquor liability policy, however, likely would extend coverage for any damages that are caused by a patron of an alcohol-serving establishment. Liquor liability insurance may also offer double coverage to employees as patrons because it is not uncommon for bartenders to partake in alcohol during a shift.
Finally, general liability and liquor liability offer different coverage limits to insured businesses. Because the consequences of an alcohol-related incident have the potential to be costlier than a general liability incident, the coverage limits for a liquor policy tend to be much higher. Of course, the coverage limit will depend on the monthly premium a business owner is willing to pay, so this cost is ultimately variable, too. Any business owner whose establishment serves alcohol should invest in both types of insurance for optimal coverage.
At RMS Hospitality Group, our expertly crafted policies are written specifically for the hospitality industry. We offer custom tailored solutions to meet any venue's specific needs. For more information, contact our knowledgeable experts today at (888) 359-8390.
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