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Insurance Coverage for Liquor Vendors

Q. How Much Liability Insurance Is A Bar Required To Purchase? 

A. Effective August 1, 1983, all bars must have liability insurance to protect them from claims under the dram shop act or otherwise demonstrate proof of financial responsibility. Minn. Stat. 340A.409 & 340A.603.

1. The insurance coverage must remain in effect for the period covered by the liquor license and must provide limits of liability of at least:
a. Bodily injury to person - $50,000 (per person)/$100,000 (aggregate)
b. Property damage - $10,000 (per occurance)
c. Loss of means of support - $50,000 (per person)/$100,000 (aggregate)

2. Effective July 1, 1985, liability insurers of bars may issue policies providing an annual aggregate policy liability limit of no less than $300,000.

Q. What Happens If A Bar Can't Find An Insurer To Cover Them?

A. Under the Market Assistance Plan the Legislature has created an Assigned Risk Plan which will cover a bar that has been rejected by traditional insurers. Minn. Stat. 340a.409, subd. 3; See also Minn. Stat. 62I.04-62I.22.  The commissioner of commerce has established a program to assist licensees in obtaining insurance coverage.

   1.  They advise licensees and municipalities subject to the financial responsibility requirements of those persons offering insurance coverage.

   2. The committee reviews and acts on all properly executed applications by helping those who have been rejected to find insurance or help them to qualify for the assigned risk plan.

   3. A liquor vendor shall be denied or terminated from coverage through theassigned risk plan if the liquor vendor disregards safety standards, laws, rules, or ordinances pertaining to the offer, sale, or other distribution of liquor.

   4. A vendor/licensee must demonstrate proof of financial responsibility as a condition for the maintenance of the license.

Q. Who Runs The Market Assistance Plan? 

A.  The Market Assistance Committee shall be made up of several different
members.

   1. Insurance carriers and producers

   2. Liquor vendors

   3. Public citizens

   4. The commissioner of commerce or their designated representative serves as an ex-officio member of the committee.

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