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Any restaurant that sells, serves, or offers a BYOB option to their patrons opens their doors to a possible liability claim. No matter if your customer hurts themselves, another customer, or the property, because it is in your establishment you may be responsible for paying for the damages and any legal fees associated with it. With liquor liability insurance, your insurance company will work with you and help cover many of the associated costs. Below are four reasons why liquor liability insurance is crucial for your restaurant.

Benefits of Liquor Liability Insurance

1. It May Be Required by Law

Every state has a set of laws for establishments that allow or sell alcohol on their premises. They are called dram shop laws. While each state has its own guidelines that vary in strictness, most states do require restaurants that sell alcohol to carry liquor liability insurance. The severity of your state’s dram shop laws affects how much your liquor liability insurance will cost. The more rigid your state’s laws are, the more expensive the insurance will be. Even if your business is located in a state that does not mandate liquor liability insurance, if you have taken out a large business loan or have a landlord, you still may be required to purchase this type of insurance.

2. Helps Protect Your Business from an Unruly Customer

Everyone knows that alcohol can alter a person’s state of mind. Sometimes, when a customer has had too much to drink, he or she can become rowdy. This customer can then hurt one of your employees or another customer. In addition, if this customer needs to be escorted out, a bouncer may cause injury and the customer may try to sue your business for an assault and battery allegation. Both of these situations clearly show why assault and battery coverage should be included in your liquor liability policy.

3. Covers Legal Fees and Court Costs

If you do end up getting sued and your business is found to have acted properly, and the liability suit is dropped, paying for legal defense fees and court costs can quickly add up. Without liquor liability insurance, these expenses can hurt your business, and may even shut your doors permanently. The good news is that liquor liability insurance can help cover your legal defense fees and court costs.

4. Helps Protect BYOB Establishments

Even if your establishment does not sell alcohol, if your restaurant allows customers to drink on the property, you can still be held responsible for any alcohol-related incidents that occur, as well as any legal fees surrounding these incidents. Because it is difficult for BYOB restaurants to control how much a patron consumes, the chances of them becoming unruly could be higher than establishments that sell alcohol.

Restaurant Insurance Programs

No matter if you sell alcohol or offer your customers to BYOB, it’s crucial that you have a liquor liability insurance plan that is customized to your establishment. Our expert team of insurance agents can help answer any questions or concerns you may have and guide you through the process of securing the proper coverage. Every state, county, and local municipality has different laws regarding liquor liability, and our team will ensure that your coverage is in accordance to the laws governing your establishment.


For more information about what insurance your establishment needs, be sure to contact RPA today. We would be happy to discuss any questions or concerns you may have to make sure your restaurant is fully covered for any mishap or accident.