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Businesses that sell and serve alcohol have a critical need for Liquor Liability coverage in today’s litigious environment 

A business may be held liable if an employee sells liquor to a minor, intoxicated person, or habitual drunkard. Unfortunately, many businesses often fail to purchase coverage.   It’s important to make sure your client understands that they could be named in a suit and forced to provide defense or indemnification even if a patron is served just one drink at their establishment, and more at a different establishment, and causes injury to a third party while driving intoxicated; the third party can sue them for contributing to the intoxication of the drunk driver.

If an underage patron is served by your client’s establishment and causes injury to another person; the other person can sue your client for serving alcohol to a minor.

Two of your client’s patrons are involved in a fight. One patron sustains injuries and sues your client’s establishment, alleging the negligent service of alcohol caused the fight

Your client may underestimate the liability risks associated with serving or selling alcohol.  You can provide a valuable service, as their agent, to educate them.  An intoxicated customer may cause an auto accident after leaving the premises. Anyone injured in the accident, including the intoxicated patron, could potentially file a lawsuit against the establishment that served the alcohol.  Many states have statutes, known as dram shop, and the in severe cases impose strict liability. In these states, a server could potentially be held liable simply because he or she served the alcohol. The injured person does not have to prove negligence.

Assault and Battery- What if a customer got rowdy and started a fight? Many claims in liquor liability are a result of an altercation or fight involving alcohol. Fortunately, a lot of liquor carriers will offer full or sub-limited assault and battery coverage. Be sure your client understands if their liquor policy contains an assault and battery exclusion or sub-limit. If neither, the coverage is silent.  

Defense Costs The cost to defend a liquor liability claim can be substantial. Without an insurance policy to cover defense costs, your client could be looking at tens of thousands of dollars just to defend themselves in liquor claim. Defense costs are typically outside, or in addition to, the policy limit. 

Here are a few claims examples in which liquor liability comes into play:

• A woman and a group of friends attended a hockey game where they each drank two beers. They later consumed more beer at a neighborhood bar. While in line for the restroom, the woman got into a fight with another patron. The woman was escorted from the bar by the bouncer, and after showing resistance, she was picked up by the bouncer and thrown to the ground. She sustained multiple injuries and required surgery. The woman filed suit against the bar, claiming her injuries stemmed from the over-service of alcohol. The claim settled for $90,000 and additional expenses totaled $15,500
• An intoxicated patron hit another man in a bar. The victim did not retaliate and left the bar to go home. The intoxicated patron and his friends followed the man and ended up assaulting him. The man was in a coma for four months and was subsequently institutionalized due to the severity of his injuries. The claim was settled for $405,000, the remaining policy aggregate limits. Defense costs exceeded $17,000.
• Bar/Tavern – A minor and his friend were served a beer at a local neighborhood bar. Shortly after leaving, the underage driver lost control of his vehicle and struck a telephone pole. His friend suffered injuries as a result of the accident. Witnesses later testified that the bartender had not requested proper identification. Suit was brought against the bar claiming illegal service to a minor. The claim settled for $60,000 and expense costs totaled $25,000. 
• Bar/Tavern – A young couple was served several drinks at a popular downtown bar. An hour after leaving the establishment, their vehicle crossed over two lanes of traffic and collided head-on with a tractor-trailer. The driver of the truck was severely injured. Suit was brought against the bar for negligent service and failing to properly train employees. The policy limit of $500,000 was exhausted and expense costs totaled $50,000.
   

Did you know?

• About three in every ten Americans will be involved in an alcohol-related crash at some time in their lives
• Habitual drunk drivers/repeat offenders make up more than one-third of drivers arrested for impaired driving
• Motor vehicle crashes remain the number one cause of death among those aged 15-20

It is extremely important for anyone selling or serving alcohol to carry liquor liability. Your client could suffer extreme damages in defense costs alone which could put them out of business. It’s a good idea to offer Liquor Liability Coverage to your client and educate them on the importance of carrying it. It may also be a good idea to have them sign off if they do not wish to carry the coverage. We provided a form for your convenience to use for these circumstances to protect yourself. 

Try our Liquor Liability Rater for a quick and easy quote.