Whether you are a bar or restaurant owner or in charge of organizing a special event, the presence of alcohol can open a multitude of potential risks. Imagine a scenario where an accident occurs, like an intoxicated customer falling and injuring themselves, or a heated altercation causes a fight and hurts another individual.  You may find yourself liable and responsible for hefty legal expenses in these situations. Surprisingly, one critical element often overlooked is obtaining liquor liability insurance.  This article illustrates why liquor liability insurance is an absolute must for business owners and event hosts. From understanding what liquor liability insurance entails to identifying who should have it, we’ll provide you with the knowledge and insights to protect yourself and ensure peace of mind.

What Are Dram Shops and Dram Shop Laws?

A dram shop is an establishment like a bar, tavern, or pub that focuses on selling, serving, or making alcohol. The term dram shop refers back to a time when these establishments sold alcohol by the dram, a small serving typically less than a shot. Although the term is no longer in use, dram shop laws still apply to those establishments and events serving alcohol. Dram shop laws are to prevent bars, stores, and other businesses from selling or serving alcohol to minors and overly intoxicated people.

Today, a majority of states in the U.S. have dram shop laws to make business owners or hosts legally responsible for damages caused by an intoxicated person. There are only a handful of states — Delaware, Kansas, Louisiana, Maryland, Nevada, South Dakota, and Virginia — that do not have dram shop laws. Securing liquor liability insurance is essential for businesses operating in states with dram shop laws.

What Is Liquor Liability Insurance?

Liquor liability insurance, also known as dram shop insurance, helps protect businesses that serve, sell, distribute, manufacture, or supply alcoholic beverages. This type of business insurance can assist in covering legal expenses arising from bodily injury or property damage caused by an intoxicated customer after being served alcohol. You can purchase this insurance as a standalone policy or add it as supplemental coverage as an endorsement to your commercial general liability insurance policy. Liquor liability insurance can help cover claims of:

• Third-Party Bodily Injuries: If an intoxicated customer at your establishment or event causes harm to another individual, liquor liability insurance can cover the injured party’s medical expenses and legal costs if the injured party decides to file a lawsuit against you. This coverage also extends to incidents involving drunk driving accidents.
• Third-Party Property Damage: If an intoxicated patron causes damage to another person’s property while on your premises, this insurance helps cover the expenses by either repair or replacement.
• Legal Fees and Medical Bills: If a lawsuit is filed from an incident involving a patron who was overserved, liquor liability insurance can help cover legal expenses, including attorney fees, settlements, or judgments up to the policy’s coverage limits.

These expenses could be overwhelming without liquor liability insurance and potentially jeopardize your business. Keep in mind, that liquor liability does not replace a general liability policy and vice versa. While liquor liability insurance addresses alcohol-related claims, a general liability policy does not protect in such cases. Therefore,  having both policies in place is important to safeguard your business from various risks.

Who Needs Liquor Liability Coverage?

A lot can go wrong when it comes to alcohol-related incidents. From drunk driving incidents, assaults, trips, and falls to alcohol poisoning, if any patrons hurt themselves or someone else, you may be liable for their actions. Some types of businesses or events that may need this coverage include:

Your state’s dram shop law may legally require you to obtain liquor liability insurance in order to secure a liquor license. Even if your state does not mandate insurance, there are still compelling reasons to consider coverage.

Can I Get One-Day Liquor Liability Coverage For an Event?

Yes, event liquor liability insurance is a short-term policy designed to cover your business during events where alcohol will be served to guests or attendees. This coverage plays a crucial role in protecting your business in various ways, including covering defense costs in the event of a lawsuit, property damage, and bodily injury resulting from alcohol consumption at your event. Depending on the policy, it can be purchased for several days, and its cost is determined based on factors such as number of attendees, the type of event, and the selected coverage limits. This coverage is suitable for a wide range of events, including:

• Weddings
• Birthday celebrations
• Corporate events
• Festivals/Fairs
• Concerts
• Sporting Events

Host Liquor Liability Coverage vs. Liquor Liability Coverage

You’ll likely find host liquor liability insurance in a commercial general liability insurance policy. Host liquor liability insurance is coverage intended for the business or entity holding the event. If your business does not sell or serve alcohol but allows people to drink it on your premises, such as at special events, host liquor insurance from your general liability policy can help cover claims your business causes, such as bodily injury or property damage. Note that this policy does not include liquor liability insurance. You’ll need liquor liability insurance coverage if your business sells, serves, or distributes alcohol.

Getting An Insurance Quote Is Easy With AIS

Our dedicated commercial insurance team can help you compare insurance options, limits, and deductibles. We make it a priority to truly understand your business. Speak with one of our Commercial Insurance Specialists today at (855) 919-4247 for a swift and seamless free quote. Our specialists are ready to provide you with a quick liquor liability insurance quote to ensure that your business and events are well-protected with the necessary coverage.

The information in this article is obtained from various sources and offered for educational purposes only. Furthermore, it should not replace the advice of a qualified professional. The definitions, terms, and coverage in a given policy may differ from those suggested here. No warranty or appropriateness for a specific purpose is expressed or implied.

From 2019 to 2020, 3.8 million people visited an emergency room due to car crash-related injuries, according to the CDC. Without health insurance, receiving medical care after a car accident could leave you with a hefty bill. Thankfully, medical payments coverage can help pay for medical expenses after a collision. This optional coverage can help cover medical costs for you and your passengers, regardless of fault. But is medical payments coverage worth it if you already have health insurance?

In the blog:

What Is Medical Payments Coverage? 

Medical payments coverage, also called MedPay, is an optional add-on insurance that covers medical expenses (up to your policy’s limits) for you and your passengers following an accident, even if you’re found at fault. MedPay can also cover your out-of-pocket costs, such as your deductible or co-pay if you have health insurance. MedPay coverage isn’t available in all states and is only legally required in Maine and New Hampshire.

Medical payments coverage can help pay for the following expenses after a car accident:

• Doctor visits
• Hospital care
• Nursing services
• Ambulance and emergency services fees
• Surgeries and X-rays
• Health insurance deductibles and co-pays
• Funeral expenses

Do I Need Medical Payments Coverage if I Have Health Insurance? 

In most states, the decision to purchase MedPay will depend on your financial situation and what types of coverages you already have. If you do not have health insurance, MedPay is likely worth the cost due to how expensive a trip to the ER can be. However, MedPay should not act as a replacement for health insurance. 

Even if you already have health insurance, MedPay coverage can help you lower costs in other ways. For example, suppose you have a health insurance plan with a high annual deductible. In that case, MedPay can cover the cost of your deductible and other out-of-pocket expenses. Additionally, if you’re involved in a car accident, your personal health insurance won’t apply to any passengers in the car—MedPay will.

Understanding MedPay Coverage Limits 

Like most insurance coverages, MedPay has coverage limits, representing the maximum amount an insurer will pay per person per covered accident. When you purchase medical payments coverage, you can select your coverage limit, with average amounts ranging from $1,000 to $10,000.

When selecting your limits, consider any other health insurance you may have. If you choose coverage limits that are higher than your health plan’s deductible, it can help you limit your out-of-pocket medical costs after an accident.

Doesn’t My Bodily Injury Liability Insurance Already Cover Medical Expenses? 

Liability insurance is required in nearly every state and covers bodily injury and property damage. However, it does not cover your own injuries or damaged property. Liability insurance only applies when you’re found responsible for injuring someone else or their property.  

What’s the Difference Between MedPay and Personal Injury Protection (PIP)?

MedPay isn’t offered in every state but is optional in most. States without MedPay typically require motorists to have personal injury protection (PIP) coverage, which also covers medical expenses for you and your passengers regardless of fault. States that require PIP are referred to as no-fault states. Drivers in no-fault states must file a claim with their insurance company for the cost of their injuries, regardless of who is at fault for the accident.

Although similar, there are a few key differences between medical payments coverage and PIP:                      

1. PIP coverage is sometimes optional and sometimes required. Medical payments coverage is almost always an optional add-on.
2. PIP coverage can extend towards lost wages if you cannot perform essential duties due to injuries sustained in a car accident. Medical payments coverage does not extend towards lost wages.
3. PIP is required in no-fault states. Medical payments coverage is only offered in states that do not have PIP.

Still Have Questions? Speak With an Insurance Specialist 

With so many available coverages, knowing what insurance you should have can sometimes feel overwhelming. Although you must carry liability insurance in most states, multiple add-on coverages may or may not be worth purchasing, depending on your vehicle and lifestyle.

Whether you have questions regarding increasing coverage, switching providers, or searching for auto insurance quotes, AIS can help. Our team of insurance specialists have the knowledge to guide you through the insurance marketplace to find coverage you can feel confident in. To speak with an insurance specialist, call (888) 772-4247.

The information in this article is obtained from various sources and offered for educational purposes only. Furthermore, it should not replace the advice of a qualified professional. The definitions, terms, and coverage in a given policy may be different than those suggested here. No warranty or appropriateness for a specific purpose is expressed or implied.