The 6 Best Liquor Liability Insurance of 2020

Protect your business from lawsuits when selling or serving alcohol

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If you sell or serve alcohol to others, you put yourself at risk of being sued for injuries and damages resulting from an accident involving someone you served. With some liquor liability settlements reaching well into the millions of dollars, that risk could come at great expense.

Liquor liability insurance pays the fees and judgments arising from liquor liability claims rather than it coming out of your own pocket. This coverage is required in many states if you own a bar, restaurant, nightclub, or other business that serves or sells alcohol. You may also want to purchase a policy if you are a caterer or if you plan to host an event where alcohol will be served to others.

Not all insurance companies offer liquor liability coverage. Of those that do, many only offer it as an add-on to an existing business liability policy. The premiums for these policies will depend on the type of business or event you want covered, how much coverage you need, and where you are located. In some cases, you can purchase up to $1 million in coverage for as little as $500 a year.

We reviewed more than 30 companies before choosing the six best liquor liability insurance companies based on coverage options, pricing, regional availability, and financial stability ratings. Be sure to check with the laws in your state regarding your business or event before shopping around for coverage.

The 6 Best Liquor Liability Insurance of 2020

Best Overall: Westchester Binding

Westchester

 Westchester

Westchester Binding wins our best overall liquor liability insurance spot thanks to the flexible and comprehensive coverage options offered by their monoline liquor liability insurance policies. Liquor liability is available to a variety of businesses and services, from private clubs to wholesale distributors, bars, and everything in between. Both licensed and unlicensed operations are eligible, and Westchester provides up to $2 million in liability protection.

Pros
  • Coverage is offered for retail establishments, bars, nightclubs, caterers, bartenders, banquet halls, and even private fraternal clubs, just to name a few

  • Liquor liability policies can provide up to $2 million in coverage

  • There is no cap on alcohol sales

  • Operations can be licensed or unlicensed

  • Assault and battery coverage is available

Cons
  • Wineries, after-hours clubs, and establishments with aggressive drink specials are restricted

  • You may have trouble getting coverage if you have a history of prior liquor or assault and battery claims

  • Not offered in all states

  • Certain businesses are subject to lower sublimits than others

Westchester Binding is a subsidiary of Chubb, a worldwide insurance company with roots reaching back to 1792. The company offers a number of insurance policy types, including liquor liability coverage with limits up to $2 million. These policies are flexible as to the type of company that can purchase the policy. There is no sublimit to the assault and battery coverage (except for adult clubs), and legal defense costs are not counted as part of the coverage limits, all of which is why it is our top choice. 

Liquor liability policies through Westchester are available as standalone products to a variety of businesses, including but not limited to bars, nightclubs, restaurants, retail shops, banquet halls, catering/bartending services, wholesale distributors, and private fraternal clubs. Though Westchester operates in all 50 states and the District of Columbia, liquor liability coverage cannot be purchased in Alaska, Alabama, Louisiana, Mississippi, Rhode Island, and West Virginia.

Policies are available whether or not you are licensed, but there are some restrictions regarding Westchester liquor liability coverage. Those affected include wineries, after-hours clubs, operations offering bottle service, and businesses with a history of related claims, to name a few.

Westchester has an A++ (Superior) rating from AM Best and a lower-than-average complaint index through the National Association of Insurance Commissioners (NAIC).  Applications can be submitted online, and you can get a quote—or even an issued policy—in just minutes with the company's FastTrack service.

Best for Small Business: BiBerk

BiBerk

 BiBerk

BiBerk offers comprehensive business liability protection with the option to add liquor liability. A Berkshire Hathaway company, BiBerk policies include a long list of coverage options to help personalize the policy to fit your company’s needs. Since they don’t use brokers or other middlemen, you can save up to 20% on premiums, earning this insurer the top spot for small business coverage.

Pros
  • General liability premiums start as low as $275

  • You can get a quote entirely online or speak to an agent if you want a more personalized touch

  • Policies are offered directly; since there are no brokers, policies cost up to 20% less than with other insurers

  • All of BiBerk’s underwriter companies are A++ rated

  • Claims can be filed online, by the phone, or by email

Cons
  • Right now, BOP policies are only offered in 28 states while general liability policies are in only 27 states

  • You’re unable to choose your own liquor liability coverage limits online

  • Standalone liquor liability insurance is not available

  • Temporary policies are not offered; only annual coverage can be purchased

As a small business owner, you already know that buying a solid business liability insurance policy is necessary. If your business sells, distributes, or serves alcohol, though, buying liquor liability coverage can be just as important. 

Part of the Berkshire Hathaway Insurance Group, BiBerk was founded in 2015 to provide insurance coverage to business owners in all 50 states. All of the companies under this Berkshire Hathaway umbrella hold A++ (Superior) financial stability ratings from AM Best, which are the highest possible marks.

Though BiBerk does not offer liquor liability policies on their own, coverage can be purchased along with a business liability policy, such as general liability or a BOP (business owner’s policy), with a variety of coverage options from which to choose. Getting a quote online is simple, though you can also call and speak with an agent if you have questions or need to make specific changes to your coverage.

While BiBerk does write policies nationwide, BOP coverage is currently only available in 28 states and general liability coverage is only offered in 27. Premiums will vary based on your business’ needs and specific factors, but general liability coverage starts as low as $275 per year.

Because of its low premiums and customizable coverage options, BiBerk is our top choice for small business liquor liability insurance.

Best for Bars: Admiral

Admiral

Admiral

With few exclusions and restrictions, Admiral offers liquor liability coverage in 47 states for businesses like bars, which are typically more difficult (and more expensive) to insure. Up to $1 million in coverage can be purchased along with a general liability policy or as a monoline (standalone) policy, earning Admiral our top spot as the best liquor liability insurance for bars.

Pros
  • Liquor liability coverage can be part of a general liability policy or monoline

  • Coverage is offered in 47 states

  • Compared to other insurance companies, Admiral does not have many excluded classes for coverage

  • Offers liquor liability coverage limits up to $1 million

  • Assault and battery coverage up to $1 million is available

Cons
  • Policy will need to be purchased through a broker

  • Admiral will not speak to you directly about your policy; instead, they will refer you to your local broker

Admiral Insurance Group has been providing insurance coverage to moderate- or high-risk businesses since 1974. They currently hold an A+ (Excellent) financial stability rating from AM Best and are a member of W.R. Berkley Corporation.

You can purchase liquor liability protection for your bar as monoline coverage or as part of a general liability policy. Coverage cannot be purchased online, however, nor will Admiral answer direct questions for you about your policy; instead, the company relies on their network of brokers, and will refer you to a trusted agent in your area.

Because many liquor liability policies will exclude businesses that stay open late or have live entertainment, Admiral Insurance may be a good option to consider for your bar. They only have a few excluded classes, which include bars that operate as gentleman’s clubs, host under-21 nights, allow mosh pits, operate as a concert venue, and/or allow firearms. Otherwise, though, up to $1 million in flexible, customizable coverage is available for bars, which is why Admiral wins this category. 

The $1 million limit is for both liquor liability and assault and battery. Coverage can be purchased in 47 states (exclusions include Alabama, Alaska, Iowa, and the District of Columbia).

Best for Restaurants: Founders Insurance

Founders Insurance

 Founders Insurance

Founders Insurance earns the title for best restaurant liquor liability insurance, with monoline policies that are geared specifically toward businesses in the hospitality industry. Their policies are flexible, even allowing for restaurants that stay open late, provide live entertainment, or have submitted liability claims in the recent past.

Pros
  • Offers monoline liquor liability in 18 states

  • Wide range of accepted risk classes

  • Up to $2 million in aggregate liquor liability coverage

Cons
  • Online quotes not available

  • Assault and battery coverage is excluded in many states

  • Coverage needs to be purchased through an agent

If you own a restaurant, you already know many of the liabilities that pose a risk to your business. Selling, serving, and/or distributing liquor to customers amplifies that risk: you could be held liable if your employees were to serve a minor, over-serve an intoxicated patron, or if someone you serve leaves your establishment and hurts themself or someone else.

Founders Insurance offers monoline liquor liability coverage in 18 states to help protect your restaurant business, even if you fall into certain risk categories by providing live entertainment, staying open late, or having a history of recent liability claims. Because of this, Founders earns the top spot for the best liquor liability insurance for restaurants. 

Though Founders has been around since 1901, the company has been specifically providing insurance coverage to businesses in the hospitality industry for over 50 years. They are headquartered in Chicago and hold an A- financial stability rating from AM Best.

Monoline liquor liability coverage through Founders covers up to $1 million per occurrence ($2 million aggregate). While assault and battery coverage is excluded in most states, up to $1 million in coverage can be added on to your policy for an additional charge (not available in Alabama). 

Founders offers flexible risk acceptance, making coverage possible for restaurants that stay open late (compared to area closing times), have had previous claims, offer live entertainment, and those that are new ventures. There is no deductible for this coverage, either.

Best for Hosts: Markel

Markel

 Markel

Markel Insurance takes the top spot for host liquor liability insurance, offering specialty event coverage starting as low as $75. Policies can be purchased up to the day before your event and cancellation coverage can also be added on for an additional cost.

Pros
  • Coverage is available for private parties, wedding events (rehearsal, ceremony, reception), or business/organization events

  • Buy a policy as late as one day before your event

  • Coverage is guaranteed to meet your venue’s insurance requirements (or your money back)

  • Host liquor liability coverage is automatically included on all special event policies, though it can be excluded for a premium credit

Cons
  • Liquor liability coverage is not available as a standalone product

  • Policies are not offered if your event will include animals, firearms, or amusement devices such as bounce houses, dunk tanks, inflatable slides, or moon walks

  • Only three coverage options to choose from, with a maximum of $2 million aggregate

  • If you want the maximum coverage allowed, you’ll need to certify that a licensed vendor or caterer will be serving the alcohol at your event

Markel has been providing niche insurance for over 70 years. Coverage is provided by a number of different insurers within the Markel umbrella, including Essentia, FirstComp, Markel American, Markel, and SureTec insurance companies. Each of these companies is rated A (Excellent) for financial stability by AM Best.

Through Markel Insurance, you can purchase liability coverage for a variety of functions, whether you are hosting a business or organization event, private party, or wedding event (such as your rehearsal dinner, a welcome gathering, the wedding ceremony, or just your reception). Host liquor liability coverage is automatically added onto these special event policies—with limits starting at $500,000—providing protection against bodily injury, property damage, and more. This simplicity makes it great for hosts who don’t need this coverage often.

Buying a policy through Markel is simple and can be completed entirely online. Once you select your policy coverage limits and preferred options, you’ll immediately be given a price. From there, you have the option to either save your quote or make the purchase. If you’re looking to buy event liability coverage, it can be purchased up to one day before your event, which is why they win our category for best host liquor liability coverage. You can also purchase cancellation coverage 14 days prior to the event.

As with all insurance policies, your insurance premiums will depend on a number of factors including your chosen coverage limits and specific details about your event. However, we found that for a Virginia wedding, five months down the line, with $500,000 in event coverage and liquor liability protection, premiums were going to be $150. The liquor liability deductible was also $150 for any claims made on the policy.

Best for Caterers: FLIP

FLIP

 FLIP

As a caterer or bartender, your business liability needs are different than those of a bar or full-service restaurant. Buying coverage through an insurance provider like FLIP (Food Liability Insurance Program) allows you to build the policy that fits you best—whether it’s standalone liquor liability coverage or a combined general and liquor liability policy—in just a few minutes online, earning this program our top spot for caterers.

Pros
  • Policies are offered to bartenders, caterers, chefs, concessionaires, vendors, individuals (including freelance/self-employed), and even mobile bartenders

  • Coverage is available as an annual policy or one- to three-day policies

  • Standalone liquor liability coverage is an option, or coverage can be purchased alongside a general liability policy

  • Up to $2 million in coverage is available

  • Can be purchased instantly online

Cons
  • Assault and battery coverage is only available when buying an annual policy

  • Coverage is not offered in nine states or Washington, D.C.

  • If you are promoting or sponsoring any entertainment at the event, coverage is not available

  • Events that allow BYOB, drinking games, complimentary drinks, bottle service, or are open past 2:00 a.m. are prohibited

The Food Liability Insurance Program, or FLIP, is a Utah-based program offering liability coverage to small businesses and individuals that sell or serve alcohol. The program is backed by Lloyd’s of London, a trusted name in insurance since 1688, which has a financial strength rating of A (Excellent) from AM Best.

A liquor liability policy through FLIP can be purchased on its own or alongside your general liability coverage. Policies are one to three days in length or for 12 months, depending on your needs. FLIP’s liquor liability-only coverage starts at $98 for one- to three-day policies and $199 for annual policies.

Thanks to its low prices and coverage flexibility options—which are aimed specifically at caterers and other similar industries—FLIP wins our top spot for best catering liquor liability coverage.

Policies can be purchased online in minutes, without the need to wait for a quote or speak to an agent. If you do need help, however, FLIP is available by phone five days a week or through live chat on their website during normal business hours.

While FLIP offers insurance coverage in all 50 states and Washington, D.C., liquor liability policies are not available everywhere: exclusions include Alabama, Alaska, Hawaii, Iowa, Kentucky, New Hampshire, Pennsylvania, Vermont, West Virginia, and the District of Columbia. You are also prohibited from coverage if your business operates in a certain way. These exclusionary operations include staying open later than 2:00 a.m., allowing for drinking games, bottle service, BYOB, or sponsoring/promoting any entertainment at your event(s), to name a few. 

Liquor liability through FLIP is available for up to $1 million per occurrence and $3 million in aggregate, depending on the coverage options you choose. Additionally, $25,000 in assault and battery coverage is available (on annual policies only).

What Is Liquor Liability Insurance?

Any time you’re planning to sell, distribute, or serve alcohol to others, you should consider liquor liability insurance. This coverage, also known as dram shop insurance, is designed to protect bars, restaurants, liquor and convenience stores, concessionaires, and even party or event hosts from liability related to an intoxicated guest.

Liability exists regardless of whether or not the person is a patron to your business or a guest in your home for a party. Liquor liability coverage offers you peace of mind that if they were to get in an accident on the way home—or otherwise cause damage or harm to someone else—you would be protected.

What Does Liquor Liability Insurance Include?

Depending on the limits and terms of your policy, liquor liability insurance can provide you and/or your business with coverage for things like legal fees, medical bills, and even settlements, if someone were to sue you for damages. 

Since you, or your business/employees, were responsible for serving alcohol to the person who caused those damages or injuries, some of the liability could fall on you. By having a valid liquor liability policy, much of that risk is instead carried by your insurance company, up to your policy coverage limits. 

Do Liquor Stores Need Liquor Liability?

Liquor stores—and really, any shops or convenience stores that sell alcohol—have liability concerns, too, even though they don’t actually serve customers. Your store could be held liable if you were to sell to a minor, sell to an intoxicated person, or even just sell the alcohol that someone consumed before getting into an accident. 

Boosting employees’ training can help mitigate those risks, as can increased ID-checking software or protocols. And, of course, liquor liability coverage (even as part of a general liability or BOP policy) can help protect you further.

How Much Does Liquor Liability Insurance Cost?

Premiums for liquor liability insurance vary widely, depending on your company or event, the length of coverage you need, number of guests, amount of alcohol sales, and the like. 

If you’re a small business buying an annual policy, you can expect liquor liability insurance to cost you somewhere between $900 to $1,200 a year. This coverage may be purchased as a standalone policy in some cases, or simply added on to your existing business liability coverage.

If you’re purchasing liquor liability insurance for a short-term event, such as a conference or wedding, or even a party, you’ll pay significantly less. For example, you can buy a policy through Markel to cover a one-day event starting as low as $75. 

How We Chose The Best Liquor Liability Insurance Companies

In choosing these top liquor liability insurance companies, we looked at more than 30 insurers, comparing the key features that each insurer provided. We sought out companies that offered a variety of coverage options, such as monoline coverage in addition to liquor liability addendums on general liability policies. We also looked at coverage areas and what sort of risk classes were excluded, to ensure that the companies chosen had a comprehensive reach.

Lastly, we looked at financial stability ratings through AM Best, to ensure that the companies chosen are able to provide liability coverage as promised.

Article Sources

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