If you operate a restaurant with a beer-and-wine license, you might assume your liquor liability exposure is minimal. After all, you're not serving high-proof cocktails or running a late-night bar. You're a family-friendly bistro, a neighborhood cafe, or a casual lunch spot.
But here's the reality: dram shop laws don't distinguish between beer, wine, and spirits. If you overserve a guest who causes an accident, you're exposed to the same liability as a full-service bar.
At Anchor Insurance, we help beer-and-wine operators understand their liquor liability exposure and navigate carrier-specific rules that affect coverage availability and pricing. This post answers the most common question we hear: "Do I really need liquor liability if I only serve beer and wine?"
The Short Answer: Yes, You Need Liquor Liability
Even if you only serve beer and wine, you need liquor liability insurance if you serve, sell, or furnish alcohol to the public. Here's why:
1. Dram Shop Laws Apply to All Alcohol
Dram shop statutes don't differentiate between beer, wine, and spirits. If you serve alcohol to someone who is visibly intoxicated or underage, and that person causes harm, you can be held liable regardless of what type of alcohol you served.
The legal standard is whether you contributed to the person's intoxication, not whether you served tequila or sauvignon blanc.
2. General Liability Policies Exclude Alcohol-Related Claims
Your general liability policy almost certainly includes a liquor liability exclusion. This means that any claim involving alcohol service - even beer and wine - will be denied by your GL carrier.
Without a separate liquor liability policy, you're self-insuring against dram shop lawsuits, which can easily exceed $1 million in damages and defense costs.
3. Landlords and Lenders Often Require It
Even if you're comfortable with the risk, your commercial lease or loan agreement probably isn't. Most landlords require tenants who serve alcohol to carry liquor liability insurance and name the landlord as an additional insured.
If you don't have coverage, you're in breach of your lease, which can lead to eviction or default on your financing.
But Isn't Beer and Wine Lower Risk Than Full Bar Service?
Yes, statistically. Beer-and-wine-only operations do have lower liquor liability claims frequency than full bars, and many carriers reflect this in their pricing and underwriting.
Here's why the risk is lower:
- Lower alcohol content: A glass of wine (12-14% ABV) or a beer (4-6% ABV) contains less alcohol than a cocktail with 1.5 oz of 80-proof liquor.
- Slower consumption patterns: Beer and wine drinkers tend to consume more slowly than spirits drinkers, especially in food-forward restaurants.
- Different clientele: Beer-and-wine restaurants often attract families, business diners, and older guests - demographics with lower claims rates than late-night bar crowds.
However, the risk is not zero, and certain factors can increase your exposure even with beer-and-wine-only service:
- High-ABV craft beers (8-12% ABV) are comparable to wine and can lead to rapid intoxication
- Wine by the glass or bottle service can result in multiple servings per guest
- Happy hour promotions (discounted wine, bottomless mimosas) encourage faster consumption
- Outdoor seating near parking lots or busy streets increases the risk of drunk driving incidents
Common Carrier Rules for Beer-and-Wine-Only Operations
Not all liquor liability carriers treat beer and wine the same way. Some have specific programs for beer-and-wine-only risks, while others underwrite them the same as full bars. Here's what we see in the market:
1. Separate Beer-and-Wine Programs (Lower Premiums)
Some carriers offer dedicated beer-and-wine liquor liability policies with reduced premiums compared to full-bar coverage. These programs typically require:
- Written confirmation that you only serve beer and wine (no spirits)
- Alcohol sales representing less than a certain percentage of total revenue (often 30-50%)
- No late-night hours (e.g., closing by 10 or 11 PM)
- Food-forward operations (not a "bar" atmosphere)
If you qualify, these programs can save 20-40% on premiums compared to full-bar rates.
2. Standard Liquor Liability (Same Pricing as Full Bars)
Other carriers don't differentiate between beer-and-wine and full-bar service. They charge the same premium and require the same limits regardless of what you serve.
This is more common with larger national carriers that use standardized rating models. It's not necessarily a bad thing - you may get better coverage or higher limits - but you'll pay more than you would with a beer-and-wine-specific program.
3. Endorsement to General Liability (Rare, But Available)
A handful of carriers (particularly for small restaurants) will add beer-and-wine liquor liability as an endorsement to your general liability policy. This is convenient for billing and administration, but it limits your ability to shop the liquor coverage separately.
We typically see this option for businesses with very low alcohol sales (under 10-15% of revenue) and no bar seating.
4. Minimum Premium Requirements
Many carriers have minimum premium requirements for liquor liability, often in the $500-$1,000 range. For small beer-and-wine operations, this can feel expensive relative to your total insurance spend.
However, when you compare it to the cost of defending a single dram shop lawsuit (often $50,000-$150,000 just in legal fees), the premium is a bargain.
What Carriers Care About for Beer-and-Wine Operations
When you apply for liquor liability coverage, carriers will evaluate several key factors to determine pricing and eligibility:
Revenue Mix
- Low alcohol revenue (under 20%): Best pricing, easiest approval
- Moderate alcohol revenue (20-40%): Standard pricing, most carriers will write it
- High alcohol revenue (over 40%): Some carriers may decline or require additional controls (training, security)
Hours of Operation
- Daytime and early evening service (close by 10 PM): Lower risk
- Service past midnight: Some beer-and-wine programs won't cover late-night hours
Service Model
- Table service only: Lowest risk (servers can monitor consumption)
- Bar seating with bartender service: Moderate risk
- Self-service (e.g., wine bars with taps): Higher risk, some carriers exclude this
Training and Procedures
- Formal alcohol service training (TIPS, ServSafe Alcohol): Can reduce premiums by 5-15%
- Written service policies (cut-off procedures, ID checking): Shows risk management maturity
- Incident logs: Demonstrates you're monitoring and documenting issues
How Anchor Insurance Finds the Right Beer-and-Wine Coverage
At Anchor, we don't assume all beer-and-wine operations are the same. We ask detailed questions about your service model, revenue mix, and hours to match you with carriers that offer the best fit.
Our process:
- 1.Determine whether you qualify for a beer-and-wine-specific program or need standard liquor liability
- 2.Shop multiple carriers to compare pricing and coverage options
- 3.Identify carriers that reward training and risk management with lower premiums
- 4.Help you structure limits that meet lease requirements without overpaying for coverage you don't need
Because we work with multiple carriers, we can find programs that treat beer-and-wine operations fairly instead of lumping you in with nightclubs and sports bars.
Frequently Asked Questions
What if I only serve wine, not beer?
Wine-only operations are typically treated the same as beer-and-wine for underwriting purposes. Some carriers may offer slightly better pricing for wine-only risks (especially wine bars with higher-end clientele), but you'll still need liquor liability coverage.
Can I add spirits later without changing my policy?
No. If you add spirits to your menu, you must notify your insurance carrier immediately. Operating with a beer-and-wine policy while serving spirits can void your coverage and leave you exposed to uninsured claims.
What if my state requires a separate license for beer vs. wine?
Some states have separate licenses for beer-only, wine-only, and beer-and-wine. For insurance purposes, most carriers treat beer-only and wine-only the same as beer-and-wine. What matters is that you're serving alcohol, not the specific license type.