What is liquor liability insurance?
Illinois businesses engaged in selling or serving alcohol are normally required to have insurance against incidents that intoxicated customers could be involved in. This is what liquor liability insurance is for.
Liquor liability insurance is specialized liability protection for situations involving over-served customers. Policies may cover injuries, assaults and more.
Which businesses in Illinois should have dram shop liability insurance?
The Illinois Liquor Control Commission refers to liquor liability as “dram shop liability insurance.” The coverage is generally required as part of a liquor license application.
Specifically, the state required $266,814.76 in dram shop liability coverage for 2023. The maximum award for related lawsuits was $101,205.60 for most of 2023. These numbers are based on the state’s Liquor Control Act of 1934, but get adjusted annually.
In some cases, businesses might want more than the minimum required coverage. Insurance usually covers legal fees in addition to judgments, and those combined would almost certainly exceed the maximum awarded amount if there’s a major lawsuit.
Additionally, a major incident could involve multiple suits. For example, consider a fight that broke out between two customers. Either might try to sue for injuries sustained, as might any bystander who was hurt unintentionally. It’s possible that even others in the room who weren’t physically injured could sue for emotional harm.
An insurance agent specializing in liquor liability can help businesses determine how much coverage they should carry.