Why Your Business Needs Liquor Liability Insurance

Last week, we talked about liquor liability insurance, and its importance for any establishment that serves alcohol. On top of having liability coverage as an add-on to your insurance policy, you also need to make sure that the people you employ are specifically trained to recognize the signs of intoxication. There are a lot of different factors that will influence a person’s level of impairment when drinking.

The legal limit for blood-alcohol content (BAC) in the United States is .08, but what it takes to reach that limit varies quite drastically from person-to-person. Generally, a standard practice to stay beneath the legal limit is to consume only one drink per hour. However, depending on an individual person, even one drink may inebriate someone to a dangerous degree.

Some factors that affect BAC include:

  • Age
  • Gender
  • Rate of consumption
  • Drink strength
  • Body type
  • Metabolism
  • Hydration
  • Emotional state
  • Food you’ve consumed
  • Medications you’re on

Since intoxication spans such a broad spectrum, and because everyone reaches certain levels at different paces, it’s important for any staff who is serving alcohol can recognize the signs of intoxication.

There are a number of ways to identify and monitor a patron’s level of intoxication. Firstly, anyone who is serving alcohol should keep track of how many drinks each patron is consuming. In addition to the rate of consumption, servers should be trained to notice other signs, such as impaired movement and slurred speech. A person who can’t walk straight certainly isn’t capable of driving a car.

Having a safety-conscious staff gives your business some liquor liability leverage if a lawsuit involving intoxication is filed, because you can show that your staff took all of the necessary measures to try to limit a patron who was at risk for becoming intoxicated. However, no matter how much your staff endeavors to keep people safe, the only guaranteed protection you have in liquor liability cases is an insurance policy.

In most states in the US, there are “dram shop” laws in place to protect consumers from the sale of alcohol to underage or intoxicated people. “Dram shop” laws place the liability for a drunk person’s conduct onto the business that sold the alcohol in the first place.

Unbeknownst to many nonprofit organizations, they may sometimes be found liable in liquor-related lawsuits if the fundraising events that they host serve alcohol. Many insurance providers offer liquor liability policies for one-time events for any organization that is hosting a fundraiser. “Dram shop” laws still apply to many nonprofit organizations in the case of fundraisers during which a free drink is served to everyone who buys an admission ticket. Legally, this is often still considered “selling alcohol” for the purposes of establishing liquor liability.

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