Liquor Liability Insurance
Protect your financial interests with a customized liquor liability insurance policy.
Trusted by over 300,000 Canadian small business owners!
Save up to 35% on your insurance
Get the best insurance quote in a few clicks!
Trusted by over 300,000 Canadian small business owners!
Save up to 35% on your insurance
Get the best insurance quote in a few clicks!
Partnerships with over 50 leading Canadian insurance providers
Partnerships with over 50 leading Canadian insurance providers
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Claims Examples
Problem: A bar or restaurant serves alcohol to a customer who later causes a drunk driving accident resulting in injuries or property damage to other people.
Outcome: Your alcohol liability insurance may cover the cost of damages that the court may award to the injured people for medical costs, loss of earnings, and pain and suffering up to your policy’s coverage limit.
Problem: While at a large public event or festival where alcohol is served, an attendee becomes intoxicated and injures another attendee, leading to a claim against the event organizer.
Outcome: Your party alcohol liability insurance may cover the injured attendee’s medical expenses as well as any legal awards made against you for medical costs, loss of earnings, and pain and suffering.
Problem: An employee consumes alcohol at a company-sponsored event and later causes harm to a third party, resulting in a claim against the employer as per the employer’s vicarious liability.
Outcome: Your event liquor liability insurance may cover the injured person’s medical expenses as well as any legal awards made against you for medical costs, loss of earnings, and pain and suffering.
Liquor Liability Insurance, Explained.
What is liquor liability insurance?
Liquor liability insurance is designed to provide financial protection incurred by an organization, establishment, or individual because of an accident or incident due to an impaired person’s actions after consuming alcohol that was served by the organization. It is also known as a party alcohol liability insurance policy.
You could be held responsible for losses, damages, or other expenses arising from third-party bodily injuries, deaths, or damage to other person’s property resulting from any accident or incident if alcohol you served to one of your customers or guests is considered to be a contributing factor.
That applies to establishments that serve alcohol (bars, pubs, clubs, restaurants, wine tasting rooms, etc.), dram shops, third-party event organizers or vendors, private parties or social hosts, and employers.
What does liquor liability insurance cover?
Liquor liability insurance is designed to provide protection against claims made against you or your establishment alleging third-party bodily injury or property damage due to the actions of an intoxicated person who was served by you or at your establishment.
For example, if a customer at your bar becomes intoxicated at your establishment and as a result of driving home becomes involved in an accident causing injuries to a pedestrian, you or your employees could be liable. Liquor liability insurance, or party alcohol liability insurance, covers you for claims related to the sale or service of alcohol. It includes financial support to cover court awards made against you and legal fees caused by an intoxicated individual to whom you served alcohol and your legal expenses up to the policy’s limit.
What are the exclusions?
A liquor liability insurance policy may exclude the following incidents for coverage:
- Violation of provincial liquor laws like selling alcohol without a licence
- Intentional acts, such as knowingly serving alcohol to an intoxicated person
- Illegal activities like serving alcohol after legal serving hours or serving alcohol to a minor
- Sexual harassment or assault involving alcohol consumption
- Claims involving employees, such as an accident or a fight that occurs during working hours or at a company event
- If the policyholder knew or should have known that serving alcohol to an individual might lead to a liquor liability-related claim
How much does liquor liability insurance cost?
The cost of liquor liability insurance varies among insurance providers. Insurers determine what premium they will charge based on the following details:
- Your location
- The type of establishment or event
- If the persons serving alcoholic beverages are trained and certified to do so
- Your years of experience as a restaurant, bar, pub, or club owner (if applicable)
- How many employees you have serving alcohol (if applicable)
- Your annual and gross projected revenue
- What the split is in revenue between your liquor sales, food sales and other sources of revenue
- Your insurance claim history
Who needs liquor liability coverage?
Any person or establishment selling or serving alcohol to the public requires liquor liability insurance, including:
- Bar, pub, tavern, restaurant, dance hall, and club owners
- Breweries and craft beer establishments
- Wineries
- Dram shops
- Organizers and hosts of corporate or private party events
- Servers or employees of any establishment serving alcoholic beverages
- Grocery, liquor, beer, and convenience stores
- Social clubs
- Caterers
- Hotels and resorts
- Venues hosting weddings, conferences, and parties
- Sports arenas, stadiums, and venues hosting concerts or other events
- Individuals hosting private events or parties
What are the available liquor liability coverage limits?
A liquor liability insurance policy’s coverage depends on the insurance provider and the policy’s details.
In general, the coverage limit of a liquor liability policy falls into two categories:
1. A policy with split limits covers specific types of claims. For example, a $1,000,000/$3,000,000/$1,000,000 split limit provides a $1,000,000 per-person third-party bodily injury limit is the maximum amount a policy will pay for each injured person in a single liability claim. The $3,000,000 is the per-incident third-party bodily injury limit for all injuries arising in a single accident or claim. The final $1,000,000 limit applies to any property damage from a single accident or incident.
2. A policy with an aggregate limit is the maximum amount your insurance provider will pay for all claims covered during the policy period. Any amount succeeding the total aggregate limit is not covered. Insurance companies will typically offer aggregate limits that match the limit per claim or can go up to a maximum of $5,000,000. That means the maximum amount the insurance company will pay in any one year will be capped at the aggregate limit.
Frequently asked questions
No. However, each province has laws and regulations governing the sale and serving of alcoholic beverages in their respective jurisdictions. Check your province’s liquor control laws and regulations to know what you are legally required to do to sell and serve alcohol.
No. Liquor liability insurance covers third-party bodily injury or property damage claims arising from selling or serving alcoholic beverages to people in your establishment or attending an event you host. It is not designed to pay for fines or penalties you are charged with by your province’s liquor control board or other authority.
Liquor liability insurance generally covers claims arising from the actions of customers or guests served alcohol by your employees in your establishment or at your event. It typically does not cover actions or injuries caused by your employees if they are intoxicated. Those may be covered under a separate general liability policy or by workers’ compensation insurance in your province.
Other business insurance coverage options to consider:
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Protect your finances and reputation from the risks associated with selling and serving alcohol with a liquor liability insurance policy from Zensurance.
Our experienced brokers can advise you on the coverage limits you need, explain exclusions and deductibles, and shop for a low-cost policy from over 50 Canadian insurance providers.
