Liability Insurance

Mitigate Your Risks

General liability insurance for your liquor store compensates others due to bodily injury or property damage caused by your business operation, including your legal defense costs.

Following are just some examples of typical claims you may be faced with:

  • A customer slips, trips and falls at your premises, either in the store or in the parking lot.
  • A customer is sold liquor while intoxicated or is under-aged and then causes injury to others or to themselves.
  • Fire breaks out at your store due to your negligence causing damage to neighbouring premise(s).
  • An employee leaves a tap on in a bathroom and causes water damage to your neighbour’s premises.
  • You use reasonable force to eject a customer from your store because you are concerned about damage to your store or injury to other customers, and the person is hurt in the process of being ejected and sues you.
  • A bottle you sold allegedly has a foreign object in it causing the customer an injury.

Having a well-designed insurance policy with adequate limits is your first step in protecting your business from these types of unexpected loss. Your second priority should be to avoid having a liability claim in the first place! Not only will a claim likely increase your insurance rates and cost you a deductible payment, you will also need to spend time working with an adjuster to assist in the claim process, which can be stressful and time-consuming as opposed to using that time to grow your business.

Risk Management Tips

Conduct regular on-site inspections of your store to identify hazards and then reduce or eliminate them. Following is a checklist of potential hazards and solutions:

  • Aisles are free of debris and clutter.
  • Cords that cross walkways are covered with rubber mats or otherwise secured.
  • “Employee Only” signs are posted at all entrances to restricted areas.
  • Your floor is in good shape with non-slip material.
  • Rubber-backed floor mats are placed at all entrances so customers can wipe their feet as they enter your store.
  • Shopping carts are available.
  • Shelving is solidly constructed of steel or hardwood, so leaning on them will not cause them to topple over.
  • Signs are clearly posted at all cash registers informing customers that assistance is available to carry purchases to their vehicles.
  • Packaging materials are broken down and removed from the sales floor as soon as the liquor has been removed.
  • Stepladders are kept in the storeroom and only brought out when needed.

Ongoing maintenance will alleviate problems before they happen. Ensure floors are swept, mopped and/or vacuumed daily. Replace or repair worn, torn, or loose floor coverings immediately.

Conduct regular on-site inspections of your store to indentify hazards and then reduce or eliminate them.

Liquor Liability Issues

All employees are required to complete ProServe training (see AGLC website for resources) and those certificates should be kept in a binder in your store. Post signs informing customers of your photo identification requirement(s). Regularly review how to deal with intoxicated customers, including techniques to deny a sale.

Leasehold improvements

When you are building a new store obtain a Certificate of Insurance from the contractor performing the work. This certificate needs to confirm that the contractor doing major renovations in your existing building has his own General Liability Insurance as well as Installation Floater or Builders Risk coverage to cover the material and labour costs during the renovation. Once the job is completed and accepted by you, make sure you adjust your policy to reflect the increased values. The certificate should add your company as an Additional Insured to their liability insurance to protect you under their policy in the event of injury or damage caused due to their operations.

Owning versus Leasing

Understand what your responsibilities are and what you are legally liable for under your lease. You should be seeking clarity on subjects such as: Who is responsible for the front sidewalk or parking lot maintenance and snow clearing? Who is responsible for damage to the store front in the event of a break-in attempt by a thief in a stolen vehicle? If there is water damage due to a pipe burst, who is responsible for the damage?

Owning a liquor store presents a unique set of risks, so it’s important that you minimize risks and the ensuing liability.

Hub International has been ALSA’s insurance partner for over 20 years. Contact Doug Davis, CIP, CRM at 780-453-8410 to access exclusive insurance products for the liquor store industry.