If you own or operate a business in the Philadelphia region, insurance is a critical consideration. Most businesses carry commercial general liability (CGL) coverage to protect against common risks, such as a customer suffering an injury on the premises. However, CGL policies often exclude certain industry-specific risks, leaving businesses vulnerable. One of these key risks is alcohol service.
Bars, restaurants, and other establishments that sell or serve alcohol need to be aware of their potential legal exposure if a customer causes harm, such as getting into a drunk driving accident. Dram Shop laws, which exist in many states including Pennsylvania and New Jersey, make it possible for victims of these accidents to hold the establishment accountable. In Pennsylvania, the law imposes liability on businesses that serve alcohol to minors or visibly intoxicated patrons.
Liquor Liability Insurance
To cover these risks, businesses must invest in liquor liability insurance—often referred to as Dram Shop insurance. A standard CGL policy does not typically cover claims related to Dram Shop lawsuits. Philadelphia businesses that depend on their liquor licenses need additional coverage to protect against these claims. In addition to claims under the Dram Shop Act, a liquor liability policy may also cover incidents like a drunk patron or employee assaulting someone on the premises. However, these policies generally do not cover damages caused to the business itself by an intoxicated individual.
How Much Does Dram Shop Insurance Cost?
On average, small businesses pay around $55 per month for Dram Shop insurance, according to Insureon, a leading marketplace for small business insurance policies. About 44% of customers pay less than $50 per month, while 23% pay between $100 and $300 per month.
Most bars purchase policies providing up to $2 million in liquor liability coverage. Restaurants typically opt for policies with around $1 million in coverage. However, these policies often include deductibles, meaning the business may still be responsible for some out-of-pocket costs in the event of a claim.
While $1 million or $2 million may seem like substantial coverage, drunk driving accidents can lead to multiple victims, some with life-altering injuries or fatalities. Victims may seek significant compensation, including both economic and non-economic damages. Multi-million dollar settlements or verdicts are not uncommon in these cases.
Contact a Philadelphia Dram Shop Attorney Today
Even with liquor liability insurance, many bars, restaurants, and their insurance companies resist paying fair compensation after a drunk driving accident. This makes it crucial to have an experienced Philadelphia Dram Shop attorney on your side. Contact Quinn Law Group, LLC in Philadelphia or New Jersey today for a free consultation.