Understanding Liquor Liability & How To Avoid Claims


Hand of bartender pouring a lager beer in tap

Having an in-depth understanding of liquor liability is one of the ways of gaining tips on how to avoid claims. The salient factor about such liability is the insurance part. Therefore when discussing liability as regards liquor, it is almost impossible to do so without indulging in liquor liability insurance. The aforesaid insurance cover is among the most important covers that anyone who is in the business of selling or producing liquor can hold. The common definition given to liquor liability insurance is; a coverage whose role is to help in the compensation of an injured party whose injuries resulted from an intoxicated person who is a client of the policyholder or whose intoxication is as a result of the liquor offered by the policyholder.

Does the Federal Government Have Uniformity on Liquor Laws?

The liability of parties whereby a third party sustains injuries stemming from the actions of an intoxicated persons vary from one state to another. Therefore, in the event, an injured party institutes a compensation claim, the factors, legal provisions and evidence that will be taken into account might be different from the ones another state puts into account. Simply put, liquor laws vary from one state to another. Hence such laws are some of the very many laws that the federal republic has left to the discretion of individual states.

The Legal Framework Regulating Liability as Regards Liquor

Dram Laws

The term dram shop is not familiar to most people despite several people having visited one before. A dram shop defined is a commercial establishment that deals in the selling of alcohol, e.g. a bar, tavern etc… Dram laws defined are laws that impose liability on the mentioned establishments in the event of an injury caused by their patrons. The best example is where an intoxicated patron goes ahead and causes a car crash resulting in serious bodily harm or fatal injuries to a third party. In such a scenario, the mentioned law will come into effect to hold the commercial establishment responsible for selling alcohol to the patron that caused the accident.

States That Have Enacted Dram Shop Liability Laws

Currently, a total number of 44 states in the US have in place dram shop liability statutes whose sole intention is to extend the liability of injuries occasioned by a patron to a third party to the dram shop. Some states put dram shops to their defense regardless of the facts at hand. In such a scenario, for the dram shop to avoid liability they have the mandate to show to the court or prosecuting authority that the patron in question was not intoxicated in their premises or they did not appear intoxicated while at the shop.

In other states, the mandate to proof that the dram shop was the source of the intoxication is upon the claimant. Further, the claimant will have to prove that the injuries sustained resulted from the intoxication of the subject patron. It is important also to take note that some homeowners insurance policies also cover liability as regards liquor to a certain extent, usually between $100 000 and $300 000.

Laws on ‘Bring Your Own Bottle’ Establishments

Bring your own bottle establishments to have in recent times been on the rise. One dilemma that most people battle with is understanding the extent of the liability of such establishments in the event a patron dining with them injures a third party. Well, when it comes to such establishments, there is an exception to the extent of their liability. For the establishments that are not in the business of selling liquor but provide patrons with a place to come with their own drink and enjoy, then such establishments can not be held liable for the injuries caused to a third party by their patrons. It is highly advisable that such establishments expressly state the kind of service they offer to avoid liability.

It is important to note that there is great importance that has been placed on responsible drinking. Therefore even insurance companies from time to time will offer discounts to policyholders that contribute to the responsible drinking campaign through educating both their employees and patrons on the importance of drinking responsibly.

How to Reduce Risk of Liability Claims

While most liquor establishments hope that their patrons will avoid any injury-causing actions, still some patrons might end up causing injury hence subsequent liability on the establishment. Therefore every commercial establishment selling liquor must ensure it holds liability insurance.

Here are some of the ways through which commercial liquor establishments can reduce the risk of liability claims:

Instituting Policies & Procedures

A good number of commercial liquor establishments have policies & procedure that has to be adhered to by both employees and patrons. Policies like no entry for patrons without IDs and not serving liquor to already intoxicated patrons have in most instances, helped such establishments avoid liability.

Employee Training

Owners and the managerial team of commercial liquor establishments should at all times ensure that their staff are properly trained. Enrolling your employees for classes like liquor serving safety class, Training for Intervention Procedures, commonly known as TIPS e.t.c, can help in the reduction of liability.


Insurance coverage for liability as regards liquor is one of the ways of reducing risk. Alcohol is likely to impair a patron’s judgement and subsequently end up becoming aggressive against a third party. Therefore even after involving all risk-reducing measures, always ensure that your dram shop has the right insurance coverage.

Interested in learning more? Check out our Liquor Liability Product Page & Speak With An Agent Today



CityScape Insurance, LLC have used their best efforts in preparing this website resource. CityScape Insurance, LLC makes no representations or warranties with respect to the accuracy or completeness of the contents of this webpage and specifically disclaims any implied definitions and/or usage implied usage within. The accuracy and completeness of the information provided are not guaranteed or warranted to produce any particular results. Neither the publisher nor author shall be liable for any loss of profit or any other personal or commercial damages, including but not limited to special, incidental, consequential, or other damage.


What Is Personal Liability Insurance?


Insurance word from wooden blocks

Lawsuits have become so common nowadays. Minor accidents like a guest stripping off the stairs in your house can land you in court. Sadly, accountability charges are some of the most expensive home coverage claims. If you are found guilty in such a lawsuit, you will be required to pay the injured party a hefty compensation. But you can protect yourself from such claims with personal liability insurance cover.

Whether you own a home or rent one, this coverage is a necessary addition to your homeowner’s or renter’s policy. Keeping reading and learn more about this coverage.

What Is Personal Liability Insurance?

Personal liability insurance provides protection from accidents you have unintentionally caused or are being held liable for. As the name suggests, the liability cover will protect you against claims that you have personally caused. The claim could be arising from property damage or bodily injury that you are directly responsible for.

With personal liability coverage, you don’t pay any claim charges from your pocket. Medical bills, repair costs, or legal fees claimed by the aggrieved party are paid from your coverage. The coverage is included in the renter’s or homeowner’s policy.

What Is Included In This Liability Cover?

What is included in the personal cover varies from one policy provider to another. Your renter’s or homeowner’s policy limit might also determine what is to be covered by your policy. Generally, the following are some of the circumstances covered by a personal policy:

  • Legal charges incurred by the person who has sued you for an accident they encountered on your property
  • Medical bills that are paid to treat injuries your guest sustained at your home
  • Income lost by the aggrieved party due to their inability to work and earn some revenue
  • Damages and bodily injuries to other people caused by any of your close family members listed in the policy
  • Away-from-home damages or injuries you have unintentionally caused to a stranger in a place other than your home, such as a hotel
  • Death benefits to the dependents of a person who died in your home due to factors you are responsible for
  • Damages you or your family member has caused on the property of another person
  • Property damage or bodily injury caused by your pet, especially dogs

What Isn’t Included in the coverage?

There are several occurrences excluded from the cover. This means you will pay for the expenses incurred by the injured person out of pocket. Scenarios that are not covered in the policy include:

  • The injured person is a member of your family who lives with you
  • If the claimant is found to be dishonest. For instance, if they have intentionally hurt their body or destroyed their belongings while in your home to benefit from financial compensation
  • You have caused damages and injuries to other people in an automobile accident
  • If you are found to have caused the accident intentionally
  • If the property damage or injuries is caused by a person not listed in your policy

How Does the Claim Work?

The claim process is not standard, and it varies in different jurisdictions. In some cases, the insured is required to file the claim. In other cases, the injured party is allowed to claim against the liable party. But, it is best to initiate the claim process yourself to avoid potential lawsuits. You risk accruing additional costs, such as defense fees, if you are reluctant to claim coverage.

A delay could also mean a worsening of injuries sustained by the claimant. Of course, this implies an increment in medical bills. If your policy providers determine that you have intentionally delayed filing the claim, they might decline your request altogether. It is, therefore, important to make a claim as soon as the incident occurs.

How Much Does the Cover Cost?

Usually, this liability cover is included in the renter’s or homeowner’s policy. This means you don’t necessarily pay for the cover by itself. In most states, the coverage is a given proportion of the homeowner’s policy. For instance, it can be $10 for every $100,000 in homeowner’s coverage paid annually. Your policy limit will also determine the amount you pay in monthly premiums. If you have a high limit, your premiums are likely to be high.

If your policy is inadequate, you boost it with a personal umbrella policy. By doing this, you will have extended coverage. In case the amount you owe the claimant is exceeding your initial coverage, the umbrella policy will pay the extra costs.

How Much Personal Coverage Do You Need?

The amount of personal coverage one needs to pay for is a personal decision. But, as you make this decision, you should take into consideration these three factors:

How much can you afford to pay: The personal liability insurance policy is the cheapest coverage in your renter’s or homeowner’s policy. Spending a little bit more on your premiums can make all the difference in your policy limit.

The value of your assets: The injured person can claim all your assets in a lawsuit. Ensure that your policy is sufficient to protect your assets.

Consider the risk associated with your home: It would be wise to increase your policy premiums if your home has inherent risks. These risks include diseased trees, a swimming pool, and pets.

Other Types of Personal Policy Covers

Personal liability insurance cover is sometimes not sufficient. However, you can supplement your coverage by adding other policies such as the business owner policy and the personal umbrella policy. The umbrella policy covers any leftover costs not paid by your coverage. On the other hand, a business policy will cover the cost of damages and injuries to other people due to business activities on your property.

A personal policy does not only protect you and your family from the financial repercussions of your negligence, but it also protects your assets. If you do not have the coverage, sign up for it now. And, if it is insufficient, increase your premiums or add to it an additional policy. This coverage is worth every dollar.

CityScape Insurance, LLC have used their best efforts in preparing this website resource. CityScape Insurance, LLC makes no representations or warranties with respect to the accuracy or completeness of the contents of this webpage and specifically disclaims any implied definitions and/or usage implied usage within. The accuracy and completeness of the information provided are not guaranteed or warranted to produce any particular results. Neither the publisher nor author shall be liable for any loss of profit or any other personal or commercial damages, including but not limited to special, incidental, consequential, or other damage.

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