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What Does Liquor Liability Not Cover?

When most people think about liquor liability, they assume that it covers all damages that may occur due to serving alcohol. However, there are actually several scenarios in which liquor liability does not apply.

This article will outline some of the most common situations in which liquor liability does not apply. Keep reading to learn more.

What is liquor liability insurance?

Liquor liability insurance protects firms that sell, serve, or distribute alcoholic beverages. This business insurance might help cover claims for physical harm or property damage caused by a drunken consumer after a firm has served them alcohol.

In addition, it is typically added separately as an add-on to an existing business liability insurance. If your company is sued, liquor liability insurance can help you protect it by providing coverage for the following:

  • Repair costs for third-party property damage

  • Third-party medical expenses

  • Settlements

  • Legal fees

What does liquor liability not cover?

You must know what liquor liability insurance does not cover. The following are some of the exclusions:

Business Property Damage

This type of insurance does not cover damage to your business property caused by a drunk customer. Instead, when your company's property or assets are damaged or stolen, commercial property insurance could assist by covering the costs of repairing or replacing it.

Libel and Slander

Liquor liability insurance does not protect against slander or libel claims. For this type of claim, general liability insurance can protect you if it does not include an exclusion for liquor-related claims.

Events Involving Underage Drinking

The insurance does not cover situations involving underage drinking, but you may have a valid claim if the minor used a convincing-looking false ID. Teach your personnel to card everyone and to monitor for fraudulent IDs.


Most individuals believe that liquor liability covers any damages due to serving and selling alcohol. This is not always the case. In fact, there are several scenarios in which liquor liability does not apply. It's also important to note that liquor liability insurance usually only applies to third-party injuries or damage.

You should consider purchasing liquor liability insurance if you operate a bar, restaurant, or similar business where alcoholic beverages are sold or served.

At Second Western Insurance Services, we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (818) 952-5203 or Click Here to request a free quote. Topics and coverage discussed in this article are not guaranteed, consult with your agents to determine what your policy does and does not cover. We are more than happy to help!

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