If you are hoping to sell alcohol, you will need a liquor license. Here’s everything you need to know about Indiana liquor license requirements.
Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your Indiana alcohol bond needs.
What Liquor Licenses Are Issued in Indiana?
Indiana’s Alcohol and Tobacco Commission (ATC) issues a wide variety of liquor licenses and permits. What specific license or permit you need will depend on what your business will do with regard to alcoholic beverages.
For example, if you’re a manufacturer, will you be brewing beer, making wine, or distilling spirits? If you’re selling alcohol, will you sell beer, wine, beer and wine, distilled spirits or all of the above? Will you be selling wholesale or retail? In a restaurant, club, bar, grocery store or other establishment?
What Are the Steps in the Licensing Process?
You probably know that certain types of liquor licenses are limited in number and typically must usually be acquired by transfer from the current owner. You can visit the Indiana ATC website for guidance regarding application requirements for the specific type of license you are seeking. Many business owners seeking an Indiana liquor license or permit hire an attorney with expertise in that area.
You may also be aware that for some license or permit types, applicants must purchase an Indiana alcohol permit bond. This requirement applies to applicants seeking a permit as a vintner, brewer, liquor wholesaler, distiller, or rectifier. The bond has a term of one year and must be renewed annually. Without an active bond in force at all times, the business may be subject to suspension or revocation of its permit.
Why is an Indiana Alcohol Permit Bond Required?
An Indiana alcohol permit bond legally obligates the permittee to pay the necessary taxes and operate in compliance with Title 7 of the Indiana Code. It also indemnifies the state against liability for any financial losses incurred as a result of a code violation by the permittee and provides a way to compensate those with valid claims for such damages.
How Are Indiana Alcohol Permit Bond Claims Paid?
The surety bond agreement for an Indiana alcohol permit bond is a three-party, legally binding contract among:
- ATC—the “obligee” requiring the bond
- The permittee—the “principal” required to purchase the bond
- The company authorizing the bond—known as the “surety.”
The terms of the bond legally obligate the principal to pay all valid claims against the bond, up to the required bond amount (or “penal sum”), which ranges from $1,000 for a vintner to $15,000 for a rectifier. This is the maximum amount that will be paid out on a claim.
Despite the principal’s legal obligation to pay claims, what usually happens is that the surety will pay a claim initially and then be repaid by the principal for the resulting debt.
How Much Does an Indiana Alcohol Permit Bond Cost?
The annual premium for an Indiana alcohol permit bond is a small percentage of the bond’s penal sum. That percentage is the premium rate, which is set by the surety for each bond applicant. The main underwriting concern is the degree of risk inherent in paying claims on behalf of the principal. The big question is, how likely is it that the principal will repay the surety without undue delay?
A high personal credit score is the best indication of a creditworthy individual. Consequently, someone with a high credit score will be assigned a much lower premium rate than someone with lesser credit. Typically, a principal with good credit will pay a premium that’s in the range of one to three percent of the bond’s penal sum.
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