Liquor liability protects establishments from potential lawsuits from a liquor-related accident. Insurance brokers understand this all too well when attempting to sell coverage, and they must help their clients understand the concept. Likewise, advising your clients to sign up for liquor liability is the right call and would benefit them greatly. Liability laws exist to hold establishments accountable when they over-serve, putting patrons a risk of injuries and accidents due to intoxication. Are you prepared to help your clients understand the importance of liquor liability, and what steps can you take to help them get there?
Understanding Liquor Liability
Your clients and their establishments will get busy during the holidays. Therefore, they must understand the severity of liquor liability and why they should secure adequate coverage.
What is Liquor Liability Coverage?
When your clients serve alcohol, their establishments can face liability for patron’s actions when they leave. The main concern is a patron leaving the establishment intoxicated. Though different states have their own rules on the definition of legal intoxication, legal intoxication is generally 0.08 and over. What happens when an intoxicated person causes an accident? Your client could be liable if someone suffers an injury, property damage, or even a fatality when their establishment allows them to leave intoxicated.
Cochrane has the expertise to ensure you can provide your clients with the best possible service while streamlining processes. Additionally, our P&C Binding team helps you apply the information and ensures that your client understands the full extent of liquor liability.
What Does Liquor Liability Cover?
Liquor liability covers the following risks:
Third-party bodily injury
Third-party bodily injury liability means your client could be held liable for injuries sustained by an individual as a result of an intoxicated patron. If the intoxicated patron leaves your client’s business and injures someone, liquor liability coverage applies to their medical or legal costs if that person sues your client’s establishment.
For example, if an intoxicated customer accidentally knocks someone over and breaks their wrist, the injured person could sue the business. Liquor liability insurance would cover immediate medical or subsequent medical costs.
Third-party property damage
Third-party property damage is similar to third-party bodily injury but affects property damage instead of bodily harm. Liquor liability insurance was developed to cover the costs associated with repairing or replacing a third party’s property due to a patron’s intoxication.
For instance, imagine an intoxicated patron leaving your client’s business and throwing a cinder block through another person’s car window. After reviewing security footage, the car owner decides to sue your client’s establishment for the property damage resulting from the intoxicated customer leaving the establishment. Liquor liability insurance could cover some or all of the client’s cost of damages and related legal expenses.
There is no one-size-fits-all liquor liability policy. Your client may need additional coverage beyond third-party bodily injury or property damage, and liquor liability can be customized to fit your clients’ specific needs. Some of the additional claims your client may need include:
· Assault and battery coverage
· Incidents of violence
· Damages from hosting a company event
· Mental damages
· Nuanced legal costs
Many variables are at play regarding coverage limits, so building the ideal coverage for your clients might require some bundling. Be sure to visit our Consumer Portal for insights into the process of selecting the right coverage for your clients’ needs.
Does Commercial Property Coverage Protect Your Client from Liquor Liability?
General liability protection offered by standard property casualty insurance only covers specific risks. Most of these policies exclude liquor liability. Most of the time, your client will need this added policy to protect themselves in the event of an accident due to the alcohol they serve. Additionally, businesses serving alcohol are not afforded liability for service-related incidents. In these cases, they will need a separate liability policy for those instances.
What Types of Liquor Liability Coverage Can You Provide Your Client?
At Cochrane, our Consumer Portal helps you decide which liquor liability coverage is the best fit for your client. Additionally, there are choices you can provide your client. You could provide them with a stand-alone policy, or you can provide them with a policy that works with their commercial coverage. Bundled coverage can save them money with multi-policy discounts from some providers.
What Else Goes Into Buying Liability Coverage?
Your client will need the right liquor liability coverage that fits their needs. Therefore, you should consider two factors. The liability limits need to be high enough to cover them in the event of a severe incident, such as a death from an auto accident. Many establishments opt for million-dollar coverage limits or higher for peace of mind.
The deductible on the liability policy will affect the premiums your client pays out and the out-of-pocket cost if their business suffers a liability incident. Advise them to ensure the deductible is manageable even during the slow season.
How Can Your Client Minimize Liquor Liability Exposure?
When your client serves alcohol, you must educate their staff on responsible service. It includes teaching them how to recognize customers who have had too much or are approaching that limit. Your client should educate their staff on how to space drinks, including slowing their response time by appearing busy, upselling food, or offering other non-alcoholic beverages as an alternative. Staff should also have training in how to cut guests off when they become unsafe to serve.
Intoxicated guests can become aggressive when they are cut off. Continuing education is beneficial for employees in liquor service. Your client may even get a discount on their liquor liability insurance premiums for ongoing training.
Cochrane’s P&C Coverage helps provide the best solutions for businesses and can ensure that your client has less to worry about during the busiest times.
Cochrane & Company
For more than six decades, Cochrane & Company has been proudly at the forefront of the insurance industry. Our experience has enabled us to innovate in powerful ways, reimagining the E&S market, and providing technology solutions that make it easy to do business with us. Licensed in all 50 states, we proudly serve clients across the nation, providing personalized and powerful solutions to help you become an even better partner for your clients. Speak to one of our experienced professionals today by calling (855) 967-0069.Social Title: Understanding Liquor Liability Basics