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Alcohol Liability Insurance



Most people who host a private party or event are not aware that they should have alcohol liability insurance. If an inebriated individual leaves the party and crashes his car, harming a third party, the insurance protects the host should the third party hold the event host responsible for the injury. Even relatives of the third party can bring civil action against the host as a the result of statutes passed through state legislatures for the purpose of holding dram shops, that is, bars, taverns, nightclubs, and other establishment that sell liquor by the "dram" responsible. Dram is simply a carry-over unit of measurement for liquor in the colonial days. These laws, known as "Dram Shop" or "Dram Shop Liability" laws, have largely moved responsibility from the intoxicated person to the business that sold him the liquor. Amazingly, juries have tended to agree that the business is more responsible than the person who drank the alcohol.



Of course, laws do vary by state, but to provide an example, the law in Texas is that civil action can be brought against "any person who serves, sells, or provides alcohol alcohol to someone who is visibly intoxicated to the extent that he presents a clear and obvious danger to himself or others." One might not expect it, but the laws has even been interpreted to allow the drunk person who crashed the car to sue the event host, bar owner, or even the restaurant.

There are two types of insurance policies: host liquor liability and business liquor liability. The host liquor liability insurance covers parties, events, and other gatherings where the server is not making a business of serving alcohol. Things that can derail this is where the management of the facilities requires a liquor license in order to serve the alcohol, or where event goers are required to pay for the drinks. In this case, the host is considered to "be in the business of selling...," and would need the busies liquor liability license.

The cost of alcohol insurance can be obtained from the same agents that furnish general liability insurance. Most businesses have general liability insurance policy that covers slips and falls, and other on the premises accidents, but it does not cover the liability involved with someone being served too much alcohol and then injuring themselves or someone else, or causing property damage. Generally, $1,000,000 is the maximum coverage for alcohol liability, the same as the max for general liability, although $2,000,000 policies can be found if one looks around. Alcohol insurance premiums for a business start at around $500 to $600 dollars, but they can go as high as $10,000.

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