Liquor licenses are often costly and hard to come by. Depending on local licensing requires, a liquor license can run you anything from $300 to $14,000 and take months to process. To steer clear of the headache that the liquor licensing process often is, some restaurants have chosen to become BYOB restaurants — meaning that customers can bring their own alcohol. However, there is a myriad of complexities associated with BYOB restaurants, like liability and legality.

What Does BYOB Mean?

BYOB, as previously mentioned, means bring your own bottle, beer, or booze. Which of the three ‘b’s that applies depends on restaurants’ individual regulations on what patrons can bring in and whether or not there is a charge associated with it. Often times BYOB refers to a bottle of wine, but some restaurants permit patrons to bring in other types of alcoholic beverages, like liquor and beer.

Additionally, some restaurants have full alcoholic drink lists but still may permit guests to bring in their own alcohol. Allowing guests to bring in their own bottle to a non-BYOB restaurant is generally considered a courtesy. Appropriately, there is almost always a corkage fee — ranging from $10 to $40 per bottle — in situations like these. Corkage fees include the labor and costs involved in wine accommodations, like lost revenue, lost restaurant space, and materials associated with managing the wine.

Is it Legal in NYC?

Sure many restaurants let their patrons bring in bottles, but unless they have less than twenty customers in the restaurant at a time or have a liquor license, they are breaking the law. In New York State, your customers cannot bring their own alcohol unless you have a liquor license to serve alcohol. Likewise, if you are waiting for your liquor license to be approved, permitting your customers to bring alcohol in the time that you wait for your license jeopardizes the approval of your application. The one exception to this rule is restaurants with a maximum occupancy of less than twenty. If you fall into that category, you can allow your patrons to bring in their own alcohol without you needing a liquor license.

Do BYOB Establishments Need Liquor Liability Insurance?

Short answer, maybe. New York requires all BYOB restaurants to have a liquor license, so one may assume that requires them to get insurance too. However, regardless of your establishment’s status as BYOB or otherwise, New York state does not require you to have liquor liability coverage (but it is highly advised that you do).

So let’s say a customer has one too many drinks and punched another customer in the face. If you are a non-BYOB restaurant, anyone injured in this accident can file a lawsuit against you for providing the alcohol. If you are a BYOB restaurant though, are you still liable?

If any of your staff came in contact with the alcohol — byways of even pouring a glass or handling the bottle — possibly. Liability for BYOB restaurants is a bit of a grey area. It is hazy and in some common policies, they are not covered.

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