By Kelli Tyler, CISR
Georgetown Insurance Service, Inc.
Silver Spring, MD
Does Your Business Need Liquor Liability Insurance?
Serving your guests alcohol at a company-sponsored event is nothing new and actually expected by many guests. What damage could one beer or glass of wine really do? I mean, we’re all adults right?
Well, unfortunately one beer can quickly turn into four and one glass of wine can turn into a bottle and guest inebriation can spell costly trouble for your business. In our litigious society, your business could be held responsible for the actions of intoxicated attendees and any injury or damage they cause to themselves, others, or property.
Whether you are hosting an open house, charity event, or a networking event, it is imperative that you verify that you have the proper liquor liability insurance and obtain an add-on or stand-alone policy if necessary. Prior to hosting an event you should take the following steps:
Contact your insurance agent. They can help you review your current policy and will know what caveats or exclusions to look for. Your agent will walk you through what liquor liability is included in your current commercial general liability (CGL) policy. Most standard CGL policies will include some form of host liquor liability. However, this is not a guaranteed inclusion and there are exclusions and limits to be aware of. For example, host liquor liability does not apply to businesses that sell, serve, or furnish alcoholic beverages. These include restaurants, bars, and catering companies. It also can be negated when there is an event charge for social events that include the cost of alcoholic beverages, when a larger event requires a permit or license, or even when an event is BYOB.
The next step is to compare your options with your agent. If the event is on a smaller scale (like a company happy hour), your existing CGL policy will probably be sufficient. However, if you are planning a large networking event or an awards banquet where you will be charging for admittance, it may warrant investigating a broadening endorsement, an add-on to your existing policy, or even purchasing a stand-alone policy. Your agent will be able to help you determine which avenue would work best for your event and what a comfortable limit would look like.
It is also vitally important to cover your bases when working with vendors. You will want to make sure that the caterers and/or venues add your business as an additional insured. It is also key to verify that anyone who serves alcohol at the event (this should NOT be someone internal to your company), has been TIPS (Training for Intervention ProcedureS) certified and has taken a responsible serving course.
Alcohol, as with all good things, is great in moderation. However, it is impossible to fully control the actions of event attendees. If you have a big event planned or are thinking about planning one for the future, we would recommend talking to your agent now. Liquor liability is definitely one coverage you don’t want to be caught without.