Is Liquor Liability insurance a legal requirement?

While liquor liability insurance is necessary to protect your business, it's also a legal requirement in many states.

Aditya Raghunath - Writer for NEXT Insurance
By Aditya Raghunath
Michelle Meyer - Editor for NEXT Insurance
Edited by Michelle Meyer
Matt Crawford for NEXT Insurance
Fact-check by Matt Crawford

Updated May 29, 2023.

Liquor liability insurance is a type of business insurance. It can provide coverage to businesses that make, serve, sell or distribute alcohol, such as restaurants and other food service businesses.

Liquor liability insurance is a legal requirement in states with dram shop laws that hold businesses responsible for injuries or damages caused by intoxicated individuals.

Liquor liability insurance can help protect your business from claims related to assault, drunk driving and property damage caused by someone who was served alcohol at your business. It can also help cover losses ranging from: 

  • Legal costs: Expenses related to pursuing or defending legal action, such as hiring a lawyer, filing fees, court costs, etc.
  • Lawsuit settlements: If you reach an agreement with the other party where they will drop the lawsuit in exchange for a sum of money or other compensation.
  • Medical bills: If a customer or patron breaks an arm or a leg due to alcohol intoxication on business premises, related medical expenses can be covered.
  • Cost to repair property damage: Costs associated with property damages can be covered under a liquor liability insurance plan.

Get Liquor Liability insurance with NEXT

NEXT specializes in small business insurance for the food service industry, including liquor liability insurance. You can easily add coverage to your general liability insurance if you are a restaurant operating in the United States.

Start a quote, customize your options and access your certificate of insurance online immediately — in about 10 minutes.

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