Restaurant Insurance – Does Your Umbrella Policy Cover Liquor Liability?

If your restaurant sells alcohol, then you should carry liquor liability coverage. And some restaurant insurance programs may even throw this coverage into the package policy for an additional charge. But purchasing this coverage as part of a package, or more importantly as a stand-alone policy could leave you with a gap in coverage that you don’t know you have. And if ever there was a need for high limits of protection it would be in the liquor liability coverage area. So how do you figure this one out?

First of all, a brief word or two about liquor liability coverage. If you sell alcohol and you don’t have it or don’t know if you have it find out now. This is one area of risk that can wipe you out and being without coverage just doesn’t make any sense. Also, if this coverage is tossed in to your package policy for free or for a very low cost, be suspicious. Check carefully to make sure that the limit of coverage here is the same as your liability limit as often the throw in protection will be for a very low limit of coverage. And believe me, if your client walks out of your establishment and has a terrible accident that kills young children or a family, the size of that claim is going to put you under without protection.

Now, the more savvy restaurant owners out there understand this and they also understand the need for high limits of liability protection. That is why they purchase a commercial umbrella policy to give higher limits of coverage above their business auto, their general liability and their workers compensation policies. But what few take the time to discover is whether or not their liquor liability insurance is also included in the umbrella protection. This is important because as I said before, the liquor liability claim can be huge and as I see it, there are 3 ways that your liquor liability protection may not be included in your umbrella limit. Here they are:

First of all, if your liquor liability policy is a stand-alone policy, then you want to make sure that it is listed as an underlying policy on your umbrella declarations sheet. If not, then your umbrella is not going to cover over the liquor liability policy. Secondly, if the liquor liability protection is an add on coverage in your package policy but for a lower limit than your stated liability limits, then the umbrella policy may not cover over the liquor liability as the underlying limit may not be high enough to qualify for umbrella protection. And last of all, your umbrella policy may simply have an exclusion that states that it does not apply to liquor liability claims. Any of these situations could leave you thinking you have umbrella protection when you don’t.

Your best approach is to hire an agent that specializes in restaurant insurance to help you navigate the complexities of this issue. If you don’t purchase your insurance from an agent who handles many, many restaurant clients, then you are probably taking an unnecessary risk with your livelihood.

At Clinard Insurance Group, in Winston Salem, NC, we have the expertise to help restaurant owners with their insurance needs. We have developed specialized restaurant insurance programs for several different types of restaurants, including Fine Dining Insurance, Casual Dining Insurance, Fast Food Insurance, and Bar & Grill Insurance as well as Catering insurance. Give us a call, toll free at 877-687-7557 or visit us on the web at www.TheRestaurantInsuranceStore.com.

Much of the source information or this article can be found in articles located at The Restaurant Answer Guy blog site.