Though they are separated by only one word, liquor liability insurance and host liquor liability insurance are not interchangeable terms. Instead, the two are differentiated by the type of business the policy is meant to cover.
What is liquor liability insurance?
As the more common type of coverage, many assume that any establishment serving liquor requires liquor liability insurance. In reality, this type of coverage exclusively covers businesses that have a license to serve alcohol. Examples of places in need of this type of coverage include bars, breweries, and restaurants. Should a patron become intoxicated and cause any damage to another patron or to an establishment’s property, liquor liability insurance covers the ensuing damages and legal fees.
What is host liquor liability insurance?
Unlike liquor liability, host liquor liability pertains to places that do not carry a liquor license. This coverage, however, allows customers to drink on-site for specific events or purposes. Although it is frequently included in general liability insurance, host liquor liability insurance can be catered to fit the exact needs of any given establishment.
Understanding the difference in these two alcohol-related insurance policies is critical for any business owner hoping to stay in business. It forces these businesses to consider the ramifications and risks of allowing alcohol while simultaneously ensuring that they will not meet social or financial ruin as a result.