If you serve alcohol at your restaurant, bar, or tavern, your liability doesn’t end when the customer walks out the door. In most states, dram shop laws mean you can be held legally responsible for damages caused by an intoxicated guest — even hours after they left your establishment.
One serious accident involving an intoxicated guest can result in a lawsuit that exceeds $1 million. Without liquor liability coverage, that comes out of your pocket.
What Is Liquor Liability Insurance?
Liquor liability insurance covers your business when a guest becomes intoxicated on your premises and then causes harm to themselves or others. It covers:
- Bodily injury claims from third parties injured by an intoxicated guest
- Property damage caused by an intoxicated patron
- Legal defense costs — even if the claim is ultimately dismissed
- Assault and battery incidents related to alcohol service (on most policies)
Dram Shop Laws: What Every State Requires
Every state where we operate has dram shop liability laws — but the specifics vary significantly:
Texas has the Texas Alcoholic Beverage Code, which holds sellers liable for serving an obviously intoxicated person. California generally limits dram shop liability but not for sales to minors or visibly intoxicated persons. Florida, Georgia, and Arizona each have their own statutes with specific standards of liability.
Knowing your state’s law isn’t enough — you need coverage that’s structured to match it.
Does General Liability Cover Alcohol-Related Claims?
This is the most common and costly misconception in the restaurant industry. Standard general liability policies include a liquor liability exclusion. That means alcohol-related claims are specifically carved out — you are not covered.
You need a separate liquor liability policy, or a combined general liability and liquor liability policy designed for food and beverage operations.
A Complete Restaurant Insurance Program
Liquor liability is just one piece. A properly structured restaurant, bar, or tavern insurance program should include:
- General liability — slip and fall, customer injuries, food-related illness claims
- Liquor liability — alcohol-related incidents on and off premises
- Commercial property — building, kitchen equipment, furniture, inventory
- Food spoilage coverage — protects inventory when refrigeration fails
- Business interruption — replaces income if you have to close temporarily
- Employment practices liability — protects against employee claims in a high-turnover industry
- Workers’ compensation — required in most states for any employees
How to Lower Your Liquor Liability Premium
Underwriters reward restaurants and bars that take responsible alcohol service seriously. Steps that can reduce your premium include:
- Implementing a formal responsible alcohol service policy
- Training staff with a certified program like TABC (Texas) or RBS (California)
- Installing security cameras
- Documenting refusal of service incidents
We Know the Food and Beverage Industry
Secure Risk Partners places restaurant, bar, and tavern coverage across Texas, California, Florida, Arizona, Georgia, and Washington. Our carriers — including Hartford, Travelers, and Lloyd’s of London — specialize in hospitality and food service risks.
Get a free quote today. We’ll review your current coverage and show you exactly what you’re missing.