An
insurance policy that protects a bar, restaurant, or other provider of alcohol from a lawsuit in the event that an intoxicated person causes damage to a third party. For example, a man may become intoxicated at Joe's Bar and then drive his car into a house. If the owner of that house sues Joe's and wins, alcoholic beverage liability insurance would pay the
damages on behalf of the bar. As with all insurance policies, Joe's would pay a
premium in order to receive coverage.