At Swarts Manning Spirits, we specialize in providing commercial insurance expertise and risk mitigation for the winery, brewery, and distillery industries. There are a number of unique risks in the spirits industry that require supplemental coverages in addition to the standard general liability, property, commercial auto, workers compensation, and umbrella policies. Crop coverage, contamination and spoilage, equipment breakdown, products liability, special events liability, and vine/trellis coverage are a few. But one pivotal coverage unique to all businesses that operate a tasting room is liquor liability insurance.
Liquor Liability Insurance
Like with a restaurant that serves alcoholic beverages, tasting rooms open to the public for product sampling and other offsite special events find liquor liability coverage an absolute necessity. Did you know that if a customer overserved alcohol in a tasting room or at an event causes injury or property damage, this could come back on the winery, brewery, or distillery that served them? If a business that sells or serves alcohol is not covered by liquor liability, it could face hefty legal costs, court fees, and potential civil and/or criminal damages.
A standard liquor liability policy includes protections for third-party bodily injury and third-party property damage caused by an intoxicated person, as well as associated legal expenses. Now the sharp insurance consumer would at this point say that some commercial general liability policies extend to liquor coverage, which could be correct in part. Most standard general liability policies do offer host liquor coverage—think overserving a guest at an office party. But those coverages, which are not found in all general liability policies mind you, would not cover businesses that regularly sell and serve alcohol.
Understanding Your Coverage
Liquor liability and general liability regularly work together in tandem. But even with a liquor liability policy there are still exclusions to coverage. For example, if a liquor license lapses liquor liability will not extend coverage. Or if an injury is either expected or intentional—those losses would not be covered. If in addition to a tasting room there is an attached restaurant, an additional endorsement will likely be needed. All these details to say, at the end of the day it is important to know the coverage intricacies of your insurance policies. That is where partnering with an insurance broker that specializes in your particular industry is so important. But regardless, if your business offers tastings or sales of alcohol—you must cover yourself with a liquor liability policy.
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