Alcohol and Liability Insurance

Alcohol and Liability Insurance: The Battle Continues

We’ve all seen it before, the family member or friend who takes full advantage of the open bar at a July wedding. We giggle at his disco dancing, with a drink in each hand, and when he fails to remember there are four steps instead of three as he exits the reception hall. While the situation may be humourous to some, this event could have serious physical and financial consequences.

While weddings present a personal risk to the bride and groom, many parties have commercial risk exposures as well. The reception hall, whether they directly serve alcohol or not, could be liable for any injuries that occur, and not just for what happens on the premises. Should a wedding guest leave the premises after consuming alcohol and injure themselves or others, all parties involved in the reception could be held liable.

Bars, nightclubs, restaurants and golf courses are examples of other commercial venues with possible alcohol-related risks. While servers are required to follow the regulations of the Alcohol and Gaming Commission of Ontario, for example, if they sell alcohol above the regulatory limits, they could put their employers at an increased risk of penalty.

Alcohol Liability Insurance: What An Insurer Might Consider In Their Risk Assessment

Each insurance company that provides coverage to establishments that serve alcohol has a different approach to risk assessment, but most insurers have a threshold regarding alcohol sales. Insurers will need to differentiate between a “bar/nightclub” and a “restaurant,” and the percentage of alcohol sales is often used to determine how the establishment is categorized. Some insurers will allow up to 50% of sales to be alcohol-based and still consider the risk to be a restaurant, while a different insurer might only allow up to 30%. There are other factors considered too, including hours of operation, as well as advertising and marketing efforts. Fine dining is often an exception to this rule; although a $50 steak with a $200 bottle of wine would constitute 75% in alcohol sales, patrons are not usually entering the establishment with thoughts of public drunkenness.

Sporting events are another example of venues with alcohol exposures. Golf courses, though normally peaceful and environmentally appeasing, are often places where the over-consumption of alcohol can have dangerous consequences. Bowling alleys, curling rinks, horseshoe pits and baseball diamonds are other examples of sports with drinking traditions. And one only needs to participate in tailgating at a professional football game to witness the possible consequences of excessive alcohol consumption.

Protect Yourself With Commercial General Liability Insurance

KTX Insurance Brokers can provide coverage for certain alcohol-related exposures with Commercial General Liability Insurance. Restaurants and bars will need to prove a three-year insurance history as required by our insurance company partners, while others may be qualified through preliminary risk assessment.


James Mior

James Mior

COMMERCIAL LINES MANAGER - James has managed the Commercial Lines department at KTX Insurance Brokers since February 2014, including Commercial Property/Liability, Commercial Auto/Fleet, and Commercial Customer Service. James obtained his RIBO licence in 2002, and has spent his entire career in Commercial Lines. Along with managing the commercial team, he also writes new business with standard Canadian insurers, as well as managing agents and Lloyd’s of London. He developed and still manages a successful I.T. insurance program, and has successfully placed coverage for thousands of clients in retail, general contracting, real estate, professional services, and errors & omissions for consultants. Unlike traditional brick-and-mortar brokerages, James leverages the technology of Kanetix to provide instant online insurance quotes for many business owners.

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