How Much Does Liquor Liability Insurance Affect Your Business?

Liquor liability laws, often known as “dram shop acts,” vary from state to state. The dangers related to serving customers too much alcohol are serious and should always be considered in every situation. Most states impose liability on those who serve intoxicating liquors to others under certain circumstances along with the hotels, restaurants, bars and other companies that employ them.

State laws vary when it comes to providing alcohol to minors, intoxicated persons, the mentally incompetent and so forth, but most states will distinguish between negligent and reckless service. Other states still base liability on what the licensee knew or should have known in the dispensing of alcoholic drinks to patrons.

State laws also differ on whether the furnishing of alcohol is the proximate cause of any injury, death or damages caused by an intoxicated person. Just how much does liquor liability insurance matter in these scenarios? Without it, the cost of fines and penalties could potentially close your doors permanently.

Your livelihood may rest in the hands of your employees

The only people standing between significant potential liability and your business are often low paid employees who work almost solely for tips. A bartender, host, or server’s incentive to serve the customer is often directly adverse to the financial interest of your desire to avoid liability issues.

Customers may like stronger drinks, and to have them delivered at a faster pace. They appreciate the server keeping their glass filled, and often the gratuity received by the bartender or server will reflect that appreciation. Unfortunately, the customer could end up inebriated to the point where they may pose a danger if he or she gets behind the wheel of a car, or they may start a brawl. In either case, you could end up responsible for any damages incurred.

Determining when to “cut off” a potential problem drinker

Servers and bartenders should be trained to see what could be viewed as indicators to refuse service. This could trigger a reaction from the customer, and the cost could be both financial (no more tips), and physical (abusive behavior) when attempting to refuse service.

The results revealed the threshold at which individuals are refused service often greatly exceeds the legal standards for intoxication, which may expose your business to liability concerns on a state-by-state basis. You probably understand just how much does liquor liability insurance matter, so speak to an agent about your risks and exposures today.