Ever wondered who’s responsible for the liquored-up actions of a restaurant patron, partygoer or wedding guest? Have you ever been in the somewhat uncomfortable position of serving alcohol to a wide variety of people, and not been quite sure whether or not it was a “safe” thing for you to do? Do you wish you could throw a fête without worrying about what will happen afterward?
These are common questions for executives, owners or others who want to wine and dine a crowd, but would rather not be held liable for the fender-benders (or worse) that could take place afterward. Ditto heads of establishments that serve alcohol on a regular basis. And who can blame them?
The good news is, there’s an insurance for that. If you don’t want to be responsible for property damage or bodily harm resulting from inebriation, host liquor liability insurance and full liquor liability insurance can help you out. Below, we’ll discuss insurance options for those who serve up libations, and which is the right one for you.
Host Liquor Liability Versus Full Liquor Liability
The main difference between host liquor liability insurance and full liquor liability insurance is whether or not the company buying the insurance engages in the serving of alcohol as a business. In other words, a bar or pub or restaurant would require full liquor liability insurance, whereas someone who only wanted to cover their bases during a party or gala could get host liquor liability insurance.
This distinction isn’t always clear, so let’s look at a few examples of how this might work out in the real world.
Full Liquor Liability
If, for instance, a small wine shop opened and wanted to serve up wine to its customers every night, it would typically need full liquor liability insurance. The same is true for a café that serves mostly breakfast, lunch and early dinner … but offers beers and mimosas. Even though the drinks are relatively light (as opposed to a tavern with a full bar), it’s still crucial that the business have full coverage if it is serving them at all.
In other words, anyone whose business model includes serving up alcohol to patrons on a regular basis needs full liquor coverage to ensure that any property damage or personal injury that results from a night (or day) of drinking at their establishment is completely covered. In fact, most U.S. states require that establishments plying their customers with booze on a regular basis have full liquor liability; that includes taverns, pubs, restaurants and the aforementioned wine bar.
Host Liquor Liability
Host liquor liability is a different animal in a few ways. For one thing, it is covered under standard general liability insurance policies, which most companies have, and doesn’t necessitate the purchase of a separate policy. For another, it is designed for companies or groups that occasionally host social get-togethers or parties where alcohol is served … not establishments whose main jam is the serving of food and alcohol.
Once again, let’s look at a few examples. If, for instance, an employee attended a company party, had some drinks, then took out a mailbox on the way home, that could conceivably be grounds for the homeowner to sue the company for property damage. Similarly, if a partygoer attended a gala at corporate headquarters, then got in a bad accident while heading home, injuring another party, that party might seek restitution from the firm.
Liquor Liability Exclusion
This is a term that sometimes causes a bit of a panic among businesses looking to entertain a crowd, and wondering if serving alcohol violates their insurance terms. The short answer is: No, it doesn’t.
The liquor liability exclusion pertains directly to businesses who are in the industry of manufacturing or selling alcohol. In such cases, they are not covered for property damage or personal injury resulting from the sale or distribution of their product unless they purchase a liability policy dedicated specifically to their business, i.e. full liquor liability coverage.
Businesses who just want a good time can rest assured: as long as your general liability policy includes host liquor liability, you’re good. Keep in mind that when you throw a party at another location, you may need to add that location to your insurance in order for it to be covered. As long as you do so, you should be fine for your holiday gathering, launch party, anniversary blowout or any other big event.