Liquor Liability Insurance: Should Insurance Agents Ride Aboard This Train?

At some point, we’ve all used Advil to cure a killer hangover. Liquor Liability Insurance is the cure for a different kind of liquor-related headache. It’s a headache that pursues alcohol sellers once drunk patrons decide to let go. 

But why this headache? Simple: Dram Shop Law. According to the Insurance Journal, these are laws that hold businesses accountable for selling alcohol to intoxicated people who later cause damage to property, injury, or even death.

Is this extra business insurance cost worth it? Definitely!

Dram Shop Law has a long-standing history in American society. And this law is what brings Liquor Liability Insurance into the picture.

What is Liquor Liability Insurance?

Liquor Liability Insurance, also known as Dram Shop Insurance, is the coverage for bodily injury or property damage caused by an intoxicated person.

It helps with claims regarding:

  • Third-party bodily injury
  • Third-party property damage
  • Legal costs
  • Assault and Battery

Why Should Agents Consider Liquor Liability Insurance?

If you look at the market, Liquor Liability Insurance can be a promising niche for insurance agents.

Small businesses often skip liquor liability coverage:

  • To save money, and/or
  • They don’t know about it.

However, small business insurance can be a great option for businesses.  

Many people believe only bars and clubs need liquor liability coverage, which is false. It is for any company which produces, markets, serves or promotes the use of alcohol in its facilities.

 

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With many uninsured businesses around, you can swoop in and strike the iron while it’s still hot! 

Is the liquor liability market profitable, though? 

IBIS World says that Bars and Nightclubs in the US are a market worth $27.1 billion.

According to Brewers Association, 2018 saw tremendous growth in the brewery industry. 

  • Microbreweries grew 15% in the past year
  • Regional craft breweries increased by 13.9%.

Undoubtedly a multi-billion dollar market should pique your interest, especially one projected to grow by 1.4% in 2019. 

GenRe backs this view as well.

And with the Dram Shop Law operational in 43 states, the need for liquor liability coverage is more than ever.

Now’s your chance! Tap into the niche and give yourself a competitive edge.

Mind you; it’s not as easy as it sounds.

Before you jump into this niche head-first, you need to know the options you can offer to your clients.

What other coverages should agents consider for their clients?

A car rams into an insured’s bar. He might walk away with his insurance gaps. But what about the insured? The insured then goes to their Liquor Liability carrier to file a claim for property damage. The carrier then declines the claim because the policy does not provide the coverage for that situation. Now what? Where does the insured go?  

As an agent, it is up to you to provide a comprehensive insurance package tailored to fit your insured’s needs like a glove.

In an article by 4x4response, they revealed numerous misconceptions for liquor liability insurance. You must be cautious with the coverages you offer clients. 

Liquor Liability Insurance does not cover for losses caused by anything outside of selling alcohol. It does not cover for losses caused due to:

  • Insured’s property damage
  • Libel and slander
  • Incidents related to underage drinking 
  • Insured’s property damage

How can you help in these cases?

An agent such as yourself can fill gaps in policies you sell to the insured.

Here are other policies to consider for your clients along with Liquor Liability Insurance:

  1. General Liability Insurance
  2. Commercial Property Insurance

1. General Liability Insurance

General Liability Insurance covers customer injuries and third-party property damage. It also includes compensation for any slander.   

If your clients find themselves in a tight spot with a patron, you can fill in insurance gaps for them.

2. Commercial Property Insurance

We’ve all watched the bar fight in Rush Hour. Jackie Chan beats up the goons. He then goes his merry way. What we don’t see is the bar owner drinking away his sorrows after his property gets destroyed.  

Indeed, an agent wouldn’t want that for their clients.  

Commercial property insurance helps businesses protect assets from fire, theft, vandalism, and other such perils.  

Take the chance and look into the liquor liability market. With customized insurance policies that will compliment your client’s needs, you can be at the top of your game.

Do you think Liquor Liability Insurance can be the next big thing for insurance agents? Comment below and let us know. 

Learn how you can flourish as an agent after one call!

Schedule a call right now and learn how you can ease your work, sell more, and increase your profits!