Packaged liquor stores are primarily engaged in selling packaged alcoholic beverages such as beer, wine, and liquor that are not for consumption on the premises. Some packaged liquor stores might also sell cigarettes, snacks, and certain other convenience items.
Owning a liquor store can be lucrative, but it also comes with a number of serious risks, from shoplifting and vandalism to fires and severe weather. What’s more, if you own a liquor store you’re always at risk for being sued if someone is injured as a result of shopping in your store or as a result of some aspect of your operations.
That’s why you need a comprehensive liquor store business insurance program that covers your unique risks and protects you from large losses that could bankrupt you. A local independent insurance agent can help you find the policies that fit your needs and budget.
Why Do You Need Packaged Liquor Store Insurance?
As a liquor store owner, you face a lot of risks, including:
- Property damage: Your building and everything inside it, including inventory, computers, furniture, fixtures, and office space, can be damaged in a variety of ways. A severe storm can cause extensive damage to the outside and inside of your store. And even a small fire can completely destroy your inventory and force you to close while you make repairs and replace damaged property.
- Theft and crime: Liquor stores are particularly susceptible to theft and crime from outsiders, as well as from employees. You might have a lot of cash on hand, making you an easy target for thieves and dishonest employees.
- Customer or general public injury: Your liquor store has a wide variety of visitors every day. Simple slip-and-fall injuries are common in your environment, and more serious injuries can occur, too. And in the worst-case scenario, you won’t just be responsible for direct medical bills for the injured party. You could be sued and forced to pay for your legal defense as well as financial payouts to the injured person or persons.
- Employee work-related injuries: Whether your employees are unloading shipments and stocking shelves or simply working the cash register, injuries can happen at any time. If an employee sustains a work-related injury or illness, you’ll be responsible for paying for their medical bills and lost wages if they have to take time off from work to recover.
There are numerous other risks you face as well, including:
- Breakdown of machinery or equipment, including coolers or other refrigeration units
- Selling contaminated products
- Liability claims related to selling alcohol
- Using your personal vehicle for company business
- Visitors to your store can damage bathrooms, display cases, inventory, or equipment
What Does Packaged Liquor Store Property Insurance Cover?
You need a variety of insurance policies to create a complete liquor store insurance program. Your physical assets are the first things you need to protect. There are several types of business insurance policies that cover your commercial property.
Commercial Property Insurance
- Covers your building (if you own it), as well as its contents, including all of your furniture, computers, office furniture and supplies, inventory, paper products, and indoor signage.
- Responds when there is a fire, storm, theft, or vandalism in your store and your commercial property is damaged or destroyed.
- Example: Alcohol is highly flammable. What might be a small fire in another environment could quickly turn into an inferno if your inventory is involved. If a fire damages part of your store or you have a total loss, commercial property insurance covers your office equipment, inventory, refrigerators, computer equipment, supplies, and all of your business property.
Business Interruption Insurance
- Part of your commercial property insurance.
- Pays for loss of income and certain fixed expenses (e.g., rent, salaries, temporary relocation expenses, etc.) if your business must close due to a covered loss.
- Example: If your business had to close to make repairs to the roof after a storm, business interruption insurance would help you pay for lost income during the repairs. It would help you pay for rent, employee salaries, and utility bills while your revenue is limited.
Equipment Breakdown Coverage
- Pays for repairing or replacing damaged or broken essential equipment, such as coolers and point-of-sale systems that are critical to the continued operation of your liquor store. Also provides income replacement if your revenue stream is interrupted while the equipment is unusable.
- Example: If your point-of-sale system breaks down and does not work at all during a busy weekend, you might have to shut down or significantly curtail your operations. Equipment breakdown coverage would help you recover many of the costs directly related to or as a result of the broken equipment.
Utility Interruption Coverage
- Business interruption coverage for the specific circumstances surrounding an interruption in your utility services, such as power or water.
- Example: If a transformer blows and you have no power for several days, this coverage offers income protection as well as reimbursement for spoiled or contaminated beverages and other related losses.
Employee Dishonesty and Crime Coverage
- Protects your store if an employee or a group of employees engages in theft, forgery, or fraud that damages your business.
- Also offers coverage in cases of shoplifting and vandalism.
- Example: If an employee steals alcohol stock and sells it for personal profit, your employee dishonesty coverage would respond and cover the related expenses according to the policy.
- Example: Your store may be targeted by thieves because you tend to keep a lot of cash on hand. Your crime coverage would help you recover the related losses according to the specifics of your policy.
What Does Liability Insurance Cover?
Liability insurance is your next line of defense in protecting your liquor store from costly problems. It protects your business when you are considered to be negligent or blamed for causing harm to an individual or another business.
- Commercial general liability (CGL) insurance provides broad protection for third-party bodily injury and property damage claims.
- Also provides coverage for product liability, advertising liability, slander, and libel claims against your liquor store.
- Example: If a liquor bottle falls off a high shelf and injures a customer, your general liability policy pays for direct costs (medical bills, etc.) as well as attorney fees, court costs, settlements, and judgments if you are sued.
- Example: A guest becomes ill from drinking contaminated or tainted alcohol. Even if the contamination occurred at the supplier, your general liability insurance would cover the resulting financial losses (medical expenses, legal expenses) that you are held responsible for.
Liquor Liability Insurance
Any establishment that sells, serves, or assists in the purchase or use of alcohol is exposed to liability claims that could result from a patron drinking too much and injuring someone or causing property damage. This includes restaurants, bars, caterers, breweries and wineries, grocery stores, and of course liquor stores.
Liquor liability insurance covers your responsibilities associated with intoxicated guests who go on to harm others. It pays for bodily injury or property damage expenses caused by an intoxicated person who was served liquor by the policyholder. It also pays for your legal costs as well as any financial settlements for the injured parties.
So if you serve alcohol to a customer who then kills someone while driving drunk on their way home from your store, you could be named in a lawsuit, and your liquor liability policy would respond.
Liquor liability claims are excluded from your general liability policy, so liquor liability insurance covers the gap. What’s more, your state or financial institution may require you to purchase liquor liability coverage. The coverage may be added as an endorsement to your CGL policy, or you can purchase a stand-alone policy. The coverage limits and specifications will vary based on your preferences, your state's requirements, your annual sales, and several other factors.
Other Liquor Store Insurance Policies to Consider
Aside from major property and liability risks, liquor store owners are likely to need several other insurance policies to protect them from financial harm and unexpected events. Talk to your independent insurance agent about your need for the following.
- Commercial auto insurance protects any vehicles owned by your liquor store. In addition, if employees drive personal vehicles for business use, you need hired and non-owned auto liability insurance.
- Workers’ compensation insurance is required for any business that has employees. It protects your workers—including store managers, stock persons, and cashiers—from the costs of work-related injuries and illnesses. This coverage pays for medical bills and lost wages for employees who sustain cuts, burns, slip-and-fall injuries, repetitive motion injuries, or any other injuries or illnesses related to their work.
- Cyber liability insurance protects your liquor store if you are the victim of a cyber breach. If your computer network or website is hacked and confidential customer or vendor information is exposed, the damage to your reputation and bottom line can be insurmountable.
- Employment practices liability coverage protects you if a current or former employee sues you for discriminatory employment practices.
- Contamination and spoilage coverage pays for certain losses if food or beverage products are spoiled or contaminated due to refrigeration breakdown, utility interruption, or some other type of foreign substance contamination. If your local board of health or another agency forces you to close because of contamination, your contamination and spoilage insurance may cover you for lost income during the shutdown period, as well as costs related to cleaning contaminated equipment, and disposing of and replacing spoiled food or beverage.
How Much Does Packaged Liquor Store Insurance Cost?
The cost of liquor store insurance depends on the policies you choose, the unique risks your business faces, the value of your inventory and equipment, and other factors like your location, number of employees, and the size of your establishment.
Your liquor liability insurance will play a large role in your overall insurance costs. The cost of liquor liability insurance will vary by state, depending on the liquor liability laws and the likelihood of being sued in your state.
An independent agent can work with you one-on-one to determine the types and amounts of coverage you need. Your agent can get quotes from multiple insurance companies so you can evaluate the cost and coverage options and make the best choice.
Benefits of an Independent Insurance Agent
Independent insurance agents simplify the search process for finding the right liquor store insurance. They’ll walk you through some handpicked policy options and explain the details.
Most importantly, they’ll be there for you when claim time comes. They know the ins and outs of the process and will make sure your claim is handled appropriately.
The Lowdown on Online Quotes
Online quotes can be tempting. They are fast and easy to get—but are they accurate? And are you getting quotes for the right coverage? For business owners, choosing speed over accuracy can cost you.
Online quotes can’t and don’t see the whole picture. They can leave out important coverage that will leave you devastated if something unexpected happens. And they can leave out cost-saving opportunities that an agent can help you take advantage of.
Instead of getting an online quote, find an independent insurance agent now, and get one-on-one consultation and affordable options for the best coverage for your unique needs.
TrustedChoice.com Article | Reviewed by Paul Martin
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