Running a business that serves alcohol can be as rewarding as it is challenging. Whether you operate a cozy pub, an upscale restaurant, or a local event venue, offering alcohol to your patrons adds a layer of complexity—and liability. Enter liquor liability insurance, a coverage designed to protect businesses like yours from claims arising from alcohol-related incidents.
But what exactly is liquor liability insurance, and why is it so crucial? Let’s explore its importance, real-life scenarios, and tips to safeguard your business.
Liquor liability insurance provides coverage for businesses that serve or sell alcohol. It protects against claims that may arise when alcohol consumption leads to incidents such as:
- Drunk driving accidents
- Property damage
- Physical altercations
- Injury or death
Even if your staff follows all the rules and refuses service to intoxicated individuals, your business could still face claims. Oregon law, for example, often places responsibility on the last establishment visited by an individual involved in an alcohol-related incident—regardless of whether that business served the individual responsibly.
Real-Life Scenarios: The Cost of Liability
To understand the importance of liquor liability insurance, consider these real-world examples from Bancorp Insurance’s experience:
- The Refused Service Incident:
An establishment refused service to two visibly intoxicated individuals. Despite video evidence of the refusal, one of the individuals later caused a fatal accident. The establishment faced a liquor liability claim because it was the last business visited. - The Hours-Later Accident:
Hours after leaving a bar, a patron engaged in street racing, resulting in a collision. The bar was still held liable, despite the time gap and the patron’s potential additional alcohol consumption elsewhere. - The Pedestrian Tragedy:
A patron, who was not intoxicated but had consumed a small amount of alcohol, struck a pedestrian after failing to turn on their headlights. The establishment where the patron drank was held responsible.
These examples illustrate how liquor liability claims can lead to significant financial losses, even for businesses that follow the rules.
The Rising Cost of Liquor Liability
Claims like these have driven up the cost of liquor liability insurance nationwide. Insurers are seeing more frequent and severe claims, leading some carriers to exit the bar and tavern market entirely.
If your business experiences a claim, you may find it harder to secure coverage in the future, or your premiums may increase significantly. It’s essential to work with an experienced insurance agent who can help you navigate these challenges.
How to Protect Your Business
Here are some proactive steps to reduce your risk and protect your business:
- Train Your Staff:
Ensure your employees are trained in responsible alcohol service. Programs like OLCC (Oregon Liquor Control Commission) training can help your team recognize signs of intoxication and handle challenging situations. - Establish Clear Policies:
Create and enforce policies for refusing service to intoxicated patrons. Make it clear that safety is your top priority, and empower your staff to act accordingly. - Document Everything:
Keep detailed records of incidents where service was refused or when customers were asked to leave. Documentation can be invaluable if a claim arises. - Invest in Liquor Liability Insurance:
Work with an experienced agent to find the right coverage for your business. Bancorp Insurance can help businesses secure liquor liability policies tailored to their unique needs. - Promote Safe Transportation:
Encourage patrons to use ride-sharing services or designated drivers. Consider offering discounts or partnerships with local transportation companies to ensure customers get home safely.
Ready to protect your business? Schedule your free consultation now by visiting Bancorp Insurance or calling 541-536-1726.
Bancorp’s insurance agents are available to provide you with a free review and consultation. Contact Us – Bancorp Insurance Call 800-452-6826
