Liquor Liability Insurance for restaurants, bars, and homeowners in Ontario

As Ontario begins to reopen, one thing’s for sure, we’re all looking forward to gathering again with our friends and family. Simple pleasures we took for granted like sharing beers on a patio sounds like a dream. As restaurants and homeowners begin to renovate their patios in hopes of turning that dream into a reality, it’s a perfect time to revisit liquor liability insurance.

As host or restaurant owner, you’re responsible for the well-being of your guests, especially if you’re serving drinks. If one of your guests is intoxicated and has an accident that causes injury or property damage, you could be at fault. This is where liquor liability insurance comes into play. It protects you and your business from going into financial ruin. Let us break it down.

For Restaurants: Does my restaurant need Liquor Liability Insurance?

Here’s a question for you: is your restaurant licensed to serve alcohol? If the answer is yes, you will need to have liquor liability added to your business’ Commercial General Liability policy. Now that you’ve added liquor into the mix, your business is prone to more risk and you have a greater burden of care, which means unless you inform the insurer who provides your commercial general liability insurance policy you may not be protected against alcohol related claims.

No restaurant or bar wants to encourage excessive drinking, but you can’t always control your guests. The moment you deliver that pint to the table, your server can be held liable. If that guest drives home intoxicated and gets into an accident, your restaurant can be held liable. If your security staff forcefully removes an intoxicated guest and that guest becomes injured, your security can be held liable. If you are found responsible in court, ensuring you have adequate coverage for your liquor related operations will assist in covering legal defense costs and the payment of any damages that may be awarded to your injured customer.

We get it, no one ever wants to think about the worst-case scenario. Accidents don’t give us a heads up before they happen – it’s up to you to be ready. Here’s a story from one of our clients:

Tom owns a restaurant and one evening they hosted a guest that arrived at the establishment already buzzed. He was served a drink but became noticeably more intoxicated. The server cut him off and called him a taxi.  The intoxicated guest asked the cab driver to drop him off by his car so he could drive home. He got into an accident. No one was hurt, but the police still investigated since it was a drunk driving case. The police visited the restaurant, but no charges were made as the restaurant followed proper protocol and documented everything. However, they also had a policy that covered them in case they were found responsible in a drunk driving case.

Tom’s story is a reminder that the legal system will always look to the host if the accident involves alcohol.

Ready to add liquor liability to your Commercial General Liability policy? Connect with your local Gifford Carr Broker.

For Homeowners: Does my Ontario homeowners insurance policy have liquor liability?

Yes, your homeowner’s insurance policy does have personal liability coverage. This will cover you to an extent. However, it does not cover you against gross negligence. This means that if you’re hosting an event that encourages drinking (like a wine tasting, or beer pong tourney), you’re responsible for your guests’ safety and allowing them to overindulge and leave your home without making arrangements for their safe return home could be seen as “grossly negligent”.

Here are some tips:

• Provide non-alcoholic drinks and food;
• Arrange for rides home;
• Encourage your guests to spend the night.

Does my homeowners insurance cover large events like backyard weddings or parties?

If you’re hosting large events like family reunions, retirement parties or weddings, you’ll want to consider adding Host Liquor Liability Insurance (or event liability). This isn’t for your average backyard BBQ. This coverage should be considered when a larger guest list makes it more difficult to monitor everyone’s alcohol intake, but it’s always best to connect with your broker first to confirm if it is needed for your event.

This one-off policy can be acquired for a specific period of time and can protect you (the host) from injury or property damage claims against where alcohol was the determining factor and you are found negligent. Although Host Liquor Liability Insurance policy isn’t required by law, it’s highly encouraged. In fact, if you are renting out someone else’s event space, they may require proof of insurance coverage in the contract. Some vendors will even ask to see proof too. As the host, do you need a special permit or license? Finding out is easy, check with your local bylaws.

Some tips for bigger events:

• Get your event permit organized early (if applicable);
• Be a good neighbour, give a heads up to your community so they know there will be some noise;
• Make sure the servers and bartenders for your event have Smart Serve.

Summary

Serving drinks? Getting the right insurance coverage is worth it. Of course, this is in addition to taking steps to help prevent your guests from over-indulging.

If you own a restaurant, you don’t want to put all you’ve worked for at risk. Liquor Liability as part of your Commercial General Liability Insurance offers peace of mind and protection.

Hosting a party? Before you raise your glass and make a toast, consider Host Liquor Liability/Special Event Insurance. You’ll never regret having it. But you definitely could regret not having it.

Questions about liquor liability? Contact your Gifford Carr Broker, we can help. Cheers!