What Types of Insurance Does a Liquor Store Need?
Whether a customer is stocking up on beer for a tailgate or looking for a unique whisky to impress dinner guests, liquor stores help many people. From the average to the exotic, liquor stores often have more options than what might be found in a local grocery store. But however fun it is to introduce a customer to their new favorite beverage, the store is not without a variety of risks.
Related: Guide to starting a liquor store
What Are Some Risks for a Liquor Store?
Hazards and risks are the unwanted guests at any event, and liquor stores have a variety of them, including
- Selling alcohol to minors or intoxicated customers
- Robberies or loss of cash
- Employee injuries
- Customer injuries
Selling Alcohol to Minors or Intoxicated Customers
One of the greatest risks that a liquor store faces is potentially selling alcohol to minors or already-intoxicated persons. The liability risk is huge: the store could be responsible for injuries to the customer and any third-party injuries caused by the customer. For example, if an already intoxicated customer purchases liquor and then causes a car accident, the store could be partially responsible for the bodily injury and property damage claims. In addition, the liquor liability risk increases for establishments that serve alcohol on-site, such as hosting a tasting event.
Other liquor liability risks include selling alcohol to habitually intoxicated individuals and failing to check IDs. Although these acts may not lead to bodily injury or property damage claims, they can still result in lawsuits against the business.
Robberies or Loss of Cash
Robberies are another risk for liquor stores since the stores likely make many cash transactions. Money is a target for theft, so liquor stores may encounter this risk, especially if the store is open at late hours. Further, robberies put employees at risk of bodily injury. In addition to third-party theft, employee dishonesty is another store concern. Dishonest employees may steal cash from the register, embezzle, or commit fraud.
Employees are at risk of injury from several workplace hazards. Most commonly, injuries occur from slips, trips, or falls, which mostly happen on slippery or cluttered walkways. Stocking shelves can also be a fall risk if the employee is required to use a ladder or step stool.
Another injury risk occurs from performing repetitive motions or lifting heavy objects. These activities lead to sprains, strains, and muscle injury. In addition, store inventory and furniture also present a bodily injury risk if inventory falls or shelving topples over.
Customers face injury hazards similar to an employee’s risks. The greatest source of concern will be slips, trips, and falls, which are commonly caused by poor maintenance or cleaning procedures. Additionally, falling inventory is a hazard, particularly if customers use improper methods of reaching high-up items—such as climbing the shelving units to get to a high shelf.
Other customer injury risks include
- Back injury or muscle strains from lifting heavy items
- Shopping carts with broken or non-existent child safety belts
- Slick or icy parking lots and sidewalks
- Customer use of forklifts or step ladders
What Types of Insurance Should a Liquor Store Consider?
Although risks can be mitigated with safety procedures, they cannot always be eliminated. As a result, insurance is an essential tool in any business plan to prevent financial disasters from harming small businesses. Some of the key policies that liquor stores should consider include the following:
- Liquor liability insurance
- Crime insurance
- Workers’ compensation insurance
- General liability insurance
Liquor Liability Insurance
Liquor liability coverage protects businesses and business owners from bodily injury or property damage claims that result from selling alcoholic beverages to minors or intoxicated persons. Liquor liability insurance is important for businesses in states with dram shop laws that hold businesses liable for the actions of intoxicated individuals who were served or sold alcohol at their establishment.
For example, if the liquor store sells alcohol to an intoxicated individual and that person causes injury or damage to a third party, this line of insurance would cover the lawsuit. Additionally, a liquor liability policy can cover assault claims.
This line of insurance is a core policy because it is specially designed to protect establishments that either serve or sell alcohol. Following an incident, a liquor liability policy covers the store for the following claim costs:
- Medical costs
- Property damage repairs
- Legal fees
- Court costs
Crime insurance is a distinctive policy that covers cash. Although cash is property of the business, property insurance policies often exclude cash from coverage. Fortunately, a liquor store can protect its cash from theft, robbery, fraud, and embezzlement with a crime insurance policy.
Liquor stores are protected from cash loss caused by employees and third parties. However, the policy will not insure theft, fraud, or embezzlement caused by owners, partners, or executives.
Workers’ Compensation Insurance
A workers’ compensation policy insures the store for employee injury claims. In many states, this policy is required if the business has employees, but even if this policy isn’t required, it is still beneficial for the company. This policy protects the store from potential lawsuits for an employee’s medical bills and lost income—expenses that quickly add up.
Also, a workers’ compensation policy offers valuable benefits to injured employees. For instance, this line of coverage provides an injured employee with compensation for
- Medical bills
- Lost income
- Rehabilitation costs
- Disability income
- Funeral expenses
General Liability Insurance
General liability coverage protects liquor stores from claims of bodily injury or property damage that result on-site or due to the store’s operation or actions of its employees. For example, the store may face a lawsuit for slip or fall injuries that result from the store’s negligence in cleaning a slippery bathroom or de-icing a slick entrance. Fortunately, general liability covers these claims, shielding the store from the responsibility of paying costly medical bills.
Some of the claim costs covered by a general liability policy include coverage for medical payments, property damage repairs, legal defense costs, and settlements. A general liability policy is a core policy for many businesses and especially for businesses that have customers on-site.
How much does liquor store insurance cost?
Liquor store insurance costs vary greatly depending on the store’s specific insurance needs. For example, an owner-operated liquor store without employees doesn’t need workers’ compensation. Conversely, a large store with numerous employees, a large building, and much inventory needs generous coverage limits to protect the store from financial hardships should a loss occur.
Generally, the greatest influences on insurance costs are coverage amounts and risk exposure. Some factors that affect insurance coverage amounts and risk exposure include the following:
– The size and condition of business-owned structures
– The number of employees on the payroll
– Employee training and vetting
– Prevention of sales to intoxicated persons or minors
– The average number of customers
– Any past or current lawsuits or insurance claims
Ultimately, the most effective way to determine insurance costs is to get a customized insurance quote. Plus, to ensure you get the best price and coverage, contact multiple insurance carriers for quotes so you can compare options and pick the policy that best fits the liquor store’s needs.