Alcohol is always in high demand given the fact that 82.46% of the US population drinks alcohol. A recent survey also established that 55% of the above-21 population consumes at least one drink a year. Business owners primarily involved in the food & beverage service sector will agree that a bar is the most lucrative outlet within an establishment. It generates a constant stream of revenue and serves to significantly boost the total turnover of a restaurant. Even standalone bars generate a sizable turnover. It is big business but it has its own set of problems. Alcohol related crimes and DUIs involving customers pose a serious threat to every business serving or distributing alcohol on their premises. The most effective way to protect your business is with liquor liability.
What is liquor liability?
Liquor liability is a business insurance product especially designed to cover and mitigate the risks borne by establishments distributing, serving or pouring alcohol. A client may end up becoming intoxicated due to excessive drinking and in such a state cause bodily harm to himself or another person. In such a case, the establishment which provided the liable party with alcohol is also held liable for the damages he is responsible for. Liquor liability will indemnify your business and provide you with financial assistance in such a situation.
Local laws and liquor liability
When you think about purchasing liquor liability, you should necessarily review provisions within the local law dictating the need for such coverage. It will give you a clear idea of how much liability coverage you would need to meet legal requirements. You would not only be able to gauge the extent of your liability as a business owner but also save on insurance cost.
Different liquor liability insurance policies offer varying levels of coverage. You need to review the policy according to the cost to benefits ratio of the policy before you make your decision. As a rule-of-thumb you should look for assault and battery coverage since such charges statistically attract the highest number of lawsuits.
Tuning your coverage
Your coverage requirement will vary according to the size and scale of your operation, the clientèle your establishment caters to and a number of other factors. It is possible to tune your coverage in such a way that it minimizes costs but still provides you with ample coverage.
- Licensing - The primary concern is to ensure that all your vendors are licensed and insured. In case your business enlists the services of vendors like caterers and third party outlets, make sure they are in compliance with local and state regulations. Check if they meet all licensing and insurance regulations before you decide to do business with them.
- Staff training - Your servers, bartenders, valets and security staff need to be well versed with local legal regulations and should be well trained in safe alcohol service methodology. Employees should undergo alcohol awareness training programs which would allow them to recognize and prevent potentially dangerous cases of intoxication. Training your staff will enable them to take preventive measures to avoid any intoxication related incidents.
- Official policies - An official policy should be established which will prevent patrons and clients from overindulging themselves. The policy should establish such ground rules as number of drinks to be served per guest, limiting service hours, etc.
- Preventive pricing - Maintain a pricing policy which will allow you to moderate the consumption of alcohol by guests. If you set prices too low, you will run the risk of guests overindulging in alcohol which will potentially raise the risk of incurring liability.
- Indemnification - Make sure your insurance policy carries an indemnification clause. Your contract wording should be clear on the point that your establishment and your employees are protected to a reasonable extent under the policy.
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