For restaurants, offering beer, wine, or craft cocktails can significantly boost revenue, enhance the customer experience, and help differentiate your brand. But with alcohol service comes a unique set of risks that many restaurant owners underestimate—until something goes wrong.
At Bozzuto Group, we understand the complex exposures facing hospitality businesses and the critical importance of having the right insurance structure in place. Whether you’re a new restaurant applying for your first liquor license or an established concept expanding your bar program, protecting your business starts with understanding your risks and securing the proper coverage.
Key Exposures for Restaurants Serving Liquor
Alcohol service doesn’t just increase liability—it changes the entire risk profile of your business. Here are the major exposures you must plan for:
- Liquor Liability (Dram Shop Exposure)
If a patron becomes intoxicated at your restaurant and later causes injury or property damage, your business can be held responsible. Claims can arise from:
- Drunk driving accidents
- Assault or altercations
- Injury to themselves or others
- Property damage
These claims are often high-severity, high-cost, and may result in lawsuits even if the incident happened off-premises.
- Employees Serving Alcohol
Servers, bartenders, and managers can inadvertently overserve or fail to check IDs properly. Claims involving minors or over-service carry significant legal consequences.
- Slips, Falls & Premise Liability
Alcohol increases the likelihood of:
- Spills
- Fights or disturbances
- Patrons falling on-site
- Injuries during busy nightlife hours
This exposure grows exponentially once liquor is added to your operations.
- Business Interruption Risk
If an incident leads to a suspension of your liquor license, your revenue can drop drastically. Many restaurants cannot survive prolonged downtime without alcohol sales.
- Increased Property Risk
Bars within restaurants add:
- Fire hazards
- Equipment breakdown risk
- Theft (including cash and alcohol inventory)
All of these increase the need for proper property and crime coverage.
The Coverage Restaurants Serving Liquor Need
Restaurants that offer alcohol should never rely on a standard business owner’s policy. You need a program that reflects the true risk. At a minimum:
- Liquor Liability Insurance
This is the cornerstone of your protection. Your policy should cover:
- Assault & battery (often excluded unless specifically added)
- Defense costs
- Dram shop liability
- Third-party bodily injury & property damage
Tip: Not all liquor liability forms are created equal. At Bozzuto Group, we negotiate broad forms with minimal exclusions.
- General Liability
Essential for:
- Slip and fall claims
- Premise liability
- Foodborne illness
- Day-to-day operations
Make sure your policy is not reduced or voided when alcohol is present—some carriers include exclusions for alcohol-related incidents unless you have liquor liability in place.
- Property Insurance
Covers:
- Business personal property
- Furniture & fixtures
- Bar equipment
- Fire damage
- Vandalism or theft
If your bar is a major revenue driver, ensure you have the correct valuation to rebuild quickly and minimize downtime.
- Loss of Business Income
If you’re forced to close temporarily due to:
- A fire
- Water damage
- An equipment breakdown
- A suspended liquor license (if endorsed)
This coverage helps you continue paying staff and expenses.
- Assault & Battery Coverage
Many insurers exclude this, but it is one of the most common claims for establishments serving alcohol. Make sure it’s added back in.
- Employment Practices Liability (EPLI)
Restaurants have high staffing levels and fast turnover—meaning increased risk of:
- Harassment claims
- Wage & hour allegations
- Discrimination complaints
EPLI is essential to protect ownership and management.
- Workers’ Compensation
Employees are your largest exposure. Proper workers’ comp helps cover:
- Slips in the kitchen
- Lifting injuries
- Cuts and burns
- Alcohol service–related altercations affecting employees
How to Get the Right Coverage
Working with a specialty brokerage like Bozzuto Group ensures you’re properly protected. Here’s what the process looks like:
- Conduct a Risk Assessment
We review:
- Your liquor license class
- Staff alcohol training (TIPS / Responsible Beverage Service)
- Bar operations
- Security measures
- Hours of operation
- Incident history
This helps us place you with a carrier that understands your business.
- Build a Tailored Insurance Program
We identify coverage gaps and create a policy structure that aligns with your exposures—not a generic restaurant package.
- Match You With the Right Carriers
Not all insurers are comfortable with alcohol service. We work with markets that specialize in restaurants, nightlife, and hospitality.
- Provide Ongoing Risk Management
We support your growth with:
- Training resources
- Incident reporting procedures
- Best practices for ID checks
- Policies that help reduce claims
Final Thoughts
Serving liquor is a profitable and exciting part of running a restaurant—but it comes with risks that must be managed thoughtfully. The right insurance coverage protects your business financially and legally, ensures long-term growth, and gives you peace of mind every day you open your doors.
If you’re unsure whether your current policies are truly covering your exposures, Bozzuto Group can help. We specialize in complex risk, emerging industries, and specialty business operations, and we’re here to ensure your restaurant is fully protected.
Want a complimentary review of your restaurant insurance program?
Reach out to us anytime.
