Liquor Liability Insurance - Commercial/Dram Shop Program

Program Summary: For University-sponsored activities or operations involving the sale or distribution of alcoholic beverages, the Risk Finance and Insurance Department has designed a special program expressly for the needs of campus-based liquor operations.  While the core aspects of this program are intended for groups conducting fixed-location beverage sales activities, special accommodations are available to extend the program to settings where alcoholic beverage service is only temporary or occasional, as may be the case for alumni fundraising or date-specific charitable events.  Accommodations are also available to groups providing “on-demand” and “for-hire” bartending services at various, host-dependent sites, as with FAS’s Student Event Services Team operations.  Specific reporting and compliance rules must be satisfied for coverage under the liquor liability insurance to apply.  Additionally, eligible event organizers or site managers have the choice accepting the program’s base deductible of $1,000,000 per occurrence or selecting the $0 deductible option for an additional premium charge.  As each individual site or entity is separately underwritten and insured under the program, the sponsoring school or department is responsible for paying the annual premium for its particular basic liquor liability insurance policy.

Eligibility: With respect to settings or events for which the University or an affiliate is considered the host, sponsor, or organizer where alcoholic beverages will be sold, only sites or service operations located in the United States, Canada, or any of the U.S. territories are eligible for coverage.  If mandated by state or local regulation, each site or operation must maintain, in continuous affect, a valid license for the nature of operations being performed at the site.  External parties, such as caterers, party organizers, valets, or security staff hired by Harvard to manage beverage service are not eligible for coverage under the University’s program and must carry their own liquor liability coverage in accordance with University risk management policy. Commercial sales or service activities for or on behalf of organizations other than Harvard University or any affiliate are also not eligible for coverage under the program.

Participation requirements: Unlike the University’s social host liability coverage, participation in and coverage under the special liquor liability insurance program is not automatic.  The sponsoring school or department must satisfy the following participation requirements to access coverage under the program:

  • The event or setting must be properly licensed (liquor, victualer, and/or entertainment in the applicable jurisdiction e.g. Boston, Cambridge, District of Columbia, etc.);
  • The location where liquor sales will be conducted must be specifically endorsed on the policy;
  • The sponsor must adhere to Harvard University Police Department’s event security/detail policy;
  • Vendors or non-Harvard staff participating in the distribution of the alcoholic beverages must maintain their own valid liquor liability insurance coverage in accordance with University risk management policy, proof of which must be presented to the University in advance;
  • Sponsor must pay any associated premium assessments and insurance procurement/service fees;
  • Sponsor must, upon request, be able to supply a) records documenting annual receipts for all product sales (liquor vs. food), b) number of employees acting as alcohol beverage servers, and c) details on annual training programs related to alcohol policy), d) a copy of the applicable licenses;

Policy Description: The special Liquor Liability coverage for commercial activities provides coverage, including legal/defense costs, for the University and its affiliates, employees, students and/or volunteers against claims for bodily injury or property damage arising out of the dispensing, selling or serving of any alcoholic beverage from a licensed premises or operation.  The basic program structure affords limits $10 million over a $1 million deductible for a nominal annual premium rate of $1.70/$100 of liquor sales*.  Eligible groups have the option of lowering the policy deductible to $0 for an additional premium charge.  Any group opting for the lower deductible is required to complete and submit a separate application (liquor sales declaration form) prior to the effective date of coverage. 

The policy also provides coverage for legal costs associated with defending against allegations of negligence in the service of alcoholic beverages.  Since the insurance company has the right, but not the duty, to defend insureds against suits, insured groups may have to front legal costs on behalf any insured defendants while pursuing reimbursement from the insurer.  Also, if after reimbursement is made by the insurer for defense costs on an insured later determined ineligible for coverage under the program, the responsible school or department may be required to refund those monies back to the insurance company.  In either case, the policy does not cover punitive damages awarded against any insured person, school, or department.

Lastly, for schools or departments selecting the $0 policy deductible option, the coverage is subject to an annual premium audit.  Shortly after the expiration date of the policy, each school or department is required submit verification of sales volumes for the prior (typically 12 month) policy period; should actual sales differ from amounts reported at coverage binding, the policyholder may receive a premium credit or assessment depending on the differential.

[*The Risk Finance and Insurance department is currently waiving collection of the premium charge for the $1M deductible option on the base liquor liability program; extension of that waiver is subject to change at the discretion of the department]

Enrollment Procedure: Harvard schools, departments, or affiliates wishing to purchase the coverage under the special Liquor Liability Policy have to submit* the enrollment form to the Risk Financing and Insurance Department along with the required background and risk profile information.  If your department manufactures, distributes or sells any type of alcoholic beverages and your group is not already confirmed as an insured party, contact the Insurance Department immediately for instructions on how to proceed.

The sponsoring department is responsible for arranging the necessary insurance coverages; we strongly suggest contacting the Risk Finance and Insurance Department at least four weeks prior to your desired coverage effective date.

Claims Procedures: It is important incidents that could lead to a claim be investigated as soon as possible so that pertinent facts can be gathered and properly documented.  Notify the Insurance Department immediately at 617-496-8830 if you become aware of any actual or alleged injuries or damages arising from any event involving alcoholic beverages.

* to submit, open the linked document in Adobe Acrobat, fill in all applicable form fields as best able, then email the completed version to risk-services@harvard.edu