Liquor Liability Insurance in Texas

What is liquor liability insurance?

Businesses that sell or serve alcohol in Texas could potentially be held financially responsible for incidents involving their intoxicated customers. This presents considerable risk, much of which might be mitigated by purchasing liquor liability insurance. 

Liquor liability insurance provides tailored coverage for covered alcohol-related incidents that result in injury or property damage. Policies may assist with legal fees and settlements.

What Texas businesses need to carry liquor liability coverage?

While Texas doesn’t legally mandate liquor liability coverage, most businesses that sell or serve alcohol should still have this coverage. Other coverages normally don’t extend to alcohol-related incidents.

Moreover, incidents involving intoxicated patrons can become quite expensive. Even a simple slip-and-fall injury that an intoxicated customer sustains could result in hefty medical expenses and lost wages. Some other incidents could be even worse.

For example, consider a situation where a fight breaks out between two intoxicated customers. Multiple lawsuits could stem from this incident:

• The intoxicated customers may sue alleging they were over-served
• Someone nearby may sue if they’re injured during the fight
• Anyone witnessing the fight may sue claiming emotional distress
• A driver may sue if the fight moves outside and their parked car is damaged

While the individuals involved in the fight would almost undoubtedly be sued in this situation, it’s quite likely that the business itself would also be named in a lawsuit. Claimants are apt to sue a business because it tends to have more assets than an individual. Carrying proper liquor liability coverage could help protect assets, by assisting with a business’ legal expenses.

What incidents does liquor liability coverage protect against?

What specific incidents are covered by a liquor liability policy largely depends on the policy’s terms, conditions and exclusions. Policies might provide coverage for incidents like the following:

• “Slip and fall” accidents involving intoxicated customers
• Sexual assault incidents perpetrated by intoxicated customers
• Other kinds of assault by intoxicated customers
• Public fights involving intoxicated customers
• DUI incidents caused by intoxicated customers after they leave the premises
• Cases of alcohol poisoning requiring hospitalization

An insurance agent who specializes in liquor liability can provide specific examples of what a given policy might cover.

Are alcohol-related incidents covered by general liability insurance?

General liability insurance is normally not an appropriate substitute for liquor liability coverage. General liability typically doesn’t cover situations such as sexual assault, other assault, fights, DUIs, and cases of alcohol poisoning, and often even excludes slip and fall accidents when the injured party has been drinking. 

Businesses that sell or serve alcohol typically should carry both liquor liability and general liability coverages, so they’re well protected. These usually can be procured together through a commercial package policy.

How much do liquor liability policies cost?

The premiums for liquor liability policies can vary. Factors like a business’s annual sales, the types of beverages sold, and past claims history typically impact the cost. 

An independent insurance agent can assist with obtaining customized quotes, and thereby determine the cost of coverage. As these agents aren’t tied to any single insurance company, they can recommend the policies with the best coverages and rates regardless of what company offers them.