Liquor liability insurance is liability coverage for companies serving, selling, distributing, manufacturing or supplying alcohol.


The companies producing, serving or selling alcohol may be subject to dram shop laws which hold companies legally responsible for the acts of customers who, after consuming too many alcoholic drinks, cause harm to third parties. At the state level, dram shop laws are developed; 43 states currently have some dram shop law.

Since businesses like restaurants, bars and breweries are more likely to face a suit related to overconsumption of alcohol, such claims are typically excluded from general liability coverage. Instead, companies which sell and serve alcohol regularly will need to buy an insurance policy specifically for liquor liability.

If a business is sued due to the actions of a customer that consumed too much alcohol at their establishment, a liquor liability insurance policy can pay for the legal costs, such as:

  • Court fees.

  • Damages if the company is found liable.

  • Settlements if the company owner and claimant decide to settle out of court.

And may also provide coverage for:

  • Bartenders who drink on the job.

  • Assault and battery when there are fight between patrons, or between a customer and a staff member.

  • Incidents like sexual assaults, stabbings, or shootings may be specified.

Liquor liability insurance may be purchased as an independent policy or bundled with a general liability policy.

When to Buy Your Liquor Liability Insurance

Before your alcohol-serving business opens, buy your liquor liability policy. Check the requirements of your state and find out if dram store legislation applies to you. However, you may still be sued if your alcohol service results in bodily injury or damage to property, even when your state has no dram shop laws.

For liquor liability insurance in Oklahoma, get in touch with the Carpenter Insurance Agency for free quotes, expert advice, and great rates.