Kathy Griffith, Assistant Vice President
Brokers serving the hospitality industry know that for restaurant and bar business operations, liquor liability insurance is their clients’ best defense against costly lawsuits stemming from patrons who have had too much to drink. But finding the right market and coverages for restaurant and bar business owners isn’t always easy.
The following are three risk trends that brokers are challenged with when it comes to placing liquor liability coverage for businesses that sell or serve alcohol.
1. High Liquor Receipts
Rates for liquor liability vary greatly between carriers and are often based on the percentage of alcohol sales to food sales. Today, brokers are faced with a growing challenge when it comes to securing liquor liability insurance for establishments that have high liquor receipts. The reason behind this is that many carriers equate a large number of liquor sales with increased risk. In 2020, businesses with higher-than-usual liquor sales will be harder to write, as many standard carriers are declining risks where alcohol sales are more than 40-50% of food costs.
2. Changes in the Market
Today, many carriers that once provided liquor liability are no longer offering coverage or have left the market entirely. Not only has this created a tighter market for finding suitable coverage, but it’s also driving up premiums to levels that can make it difficult for brokers to convince their clients of the importance of purchasing liquor liability to protect against the risks associated with “overserved” patrons.
3. Low Assault and Battery Limits
A good deal of alcohol-related liability claims filed against bars, taverns and restaurants are a result of liquor-induced fights or altercations. Today, the simple act of an employee escorting an intoxicated and disruptive patron to the door is often all that is necessary to trigger an assault-and-battery allegation. For this reason, many carriers are looking for ways to better mitigate their exposure to these types of risks with sublimits. For example, a liquor liability policy may have a $1 million limit for assault and battery, but have a dangerously low sublimit of just $50,000.
If you have business clients with operations that serve alcohol, it’s vital they are protected from potential financial losses with a liquor liability policy. Even if a business is found to have acted properly and a liability suit is ultimately dismissed, it could still be responsible for pricy legal defense fees and court costs.
At Worldwide Facilities, we have extensive market reach in the restaurant and bar space with the capacity for writing broad coverage and risks with 100% of liquor receipts. To learn more, please contact Kathy Griffith at KGriffith@wwfi.com or call 602-680-2011.