What does "liquor liability insurance" cover?

Liquor liability insurance is specifically designed to protect establishments that sell or serve alcohol from legal claims and financial losses related to alcohol-related incidents. This type of insurance covers legal fees and damages that may arise from situations such as drunk driving accidents, injuries or damages caused by patrons who were overserved alcohol, or violations of local alcohol laws.

Businesses that serve alcohol, such as bars, restaurants, and event venues, face unique risks associated with the consumption of alcohol. If a patron injures someone or causes property damage, the establishment could be held liable. Liquor liability insurance provides a financial safety net for these businesses, ensuring they can defend themselves legally and cover any settlements or judgments that may result from such claims.

In contrast, other options do not pertain to the specific coverage provided by liquor liability insurance. Employee health benefits relate to workers' compensation or health insurance plans, inventory loss from theft is typically covered by general business property insurance, and regular business operating expenses are part of the overall business budget, not covered under liquor liability policies.