liquor liability

Dram Shop Laws: What Restaurant Owners Need to Understand

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Dram shop laws can be difficult to understand. Every state and local jurisdiction has different standards, and it’s not always clear who is liable for what. This prompts several questions—what does the dram shop act mean to a seller or server? Who is typically liable under a dram shop law? The answers to these questions are important — especially for restaurant owners who serve alcohol to guests. Restaurant owners need to be aware of the liabilities they face and implement smarter policies — such as the following — to address these risks.

Always Serve Responsibly

Bar and restaurant patrons are often prompted to “drink responsibly,” but a bartender’s obligation to serve responsibly should not be forgotten. This means that servers should typically serve just one drink at a time, always check the IDs of patrons, and possibly even enforce a per-customer drink limit. These policies may be easy to implement, but it’s even more important that they are enforced. Failure to follow responsibly serving guidelines can be a liability for restaurants.

Pay Attention to Inebriation

One of the most important responsibilities of a server is to pay attention to the level of inebriation amongst customers. This means that bartenders should check for obvious signs of drunkenness — slurred speech, lack of coordination, and louder tone of voice, for example — and proceed with caution when these signs begin to appear. If it is apparent that a patron is fully inebriated, servers should cease serving alcohol and encourage the patron to drink water or eat some food. Both of these steps can help absorb alcohol from the digestive tract and slow down further inebriation.

Prevent Alcohol-Related Accidents

Dram shop laws are designed to hold all parties responsible for alcohol-related damages liable for their role in the incident. For bartenders and restaurants, this means that they could hypothetically face liability for serving a patron who later causes damages. The best defense against this potential outcome is to prevent any such accidents from occurring. If a patron is too drunk to drive, for example, a bartender should call them a cab or rideshare. It’s also wise to invest in liquor liability insurance to protect against potential claims of liability.

Foster an Environment of Prevention

Prevention is the key to safe and responsible alcohol serving. Restaurants should always approach alcohol with potential consequences of overserving in mind, and bartenders should be on the lookout for signs that a patron is already drunk. It is every restaurant owner’s responsibility to train staff in these practices and instill principles of safe serving in every staff member. This is the best way to avoid potential liabilities and minimize the possibility of an accident that can cause damage and injuries.

About Coastal Oak Insurance Services

At Coastal Oak Insurance Services, we strive to protect your personal and business assets from coast to coast. When you work with us, you’re family. Contact us today at (949) 519-3738 to learn more about how we can provide you with comprehensive and tailored insurance coverage.

liquor liability

Liquor Liability Risks During the Holidays

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It’s unfortunately true that fatal DUI accidents are at an annual high during the holiday season. Many people experience depression, anxiety, and loneliness during this time of year, which can lead to drinking — and drinking can lead to ill-fated decisions. Owners of bars and restaurants that serve alcohol might be wondering what holiday liquor liabilities they’re exposed to. Party hosts might even wonder, is the liability worth it to have liquor at my party? If you plan to serve alcohol during the holidays, it’s important to follow these four tips for minimizing liability and reducing the likelihood of any DUI incidents.

Pay Attention to Signs of Intoxication

One of the most important responsibilities of a host or server is simply paying attention to the signs of intoxication. It’s always a bad idea to serve a guest who’s obviously intoxicated, and signs of intoxication can include aggression, slurred speech, and drinking quickly. Similarly, if a guest exhibits behavior indicating that they are approaching intoxication, they should be served with caution. Guests like this may be loud and drinking quickly but otherwise remain composed. Liability arises when these precautions are disregarded.

Educate Staff on Their Responsibilities

For bar and restaurant owners, it’s important to educate staff on the responsibilities of serving alcohol — especially liquor. Staff should always understand how to watch for intoxication and strategies to encourage patrons to slow down or stop drinking. Owners should regularly remind staff of the importance of these principles. This knowledge comes from training, and establishment owners must take the time to educate their staff. This is one of the most effective strategies for minimizing liquor-related liability, especially during the holidays when the risk of DUI accidents is heightened.

Deny Service to Patrons When Necessary

Sometimes it becomes necessary for a server or party host to cut off a guest and stop serving them alcohol. This may happen when a patron enters an establishment and they’re already clearly intoxicated or aggressive. Regardless of the cause, though, it’s a skill that every person serving liquor needs to possess. The best strategy is to politely decline to serve alcohol and instead offer water or food, if it’s available. This can be a contentious situation, but it’s better than becoming liable for overserving. Liquor liability insurance can protect establishments from costs associated with this charge, but it’s every establishment’s responsibility to reduce the risk.

Minimize Your Business Liability

Liability insurance for establishments that serve liquor is one of the most important investments an owner can make. Even the most careful server may be faced with a charge of overserving, and this isn’t the only liability that an establishment can face. Any other claim of property damage or bodily harm may result in a claim against a bar or restaurant. It’s important to protect against the costs of such claims.

About Coastal Oak Insurance Services

At Coastal Oak Insurance Services, we strive to protect your personal and business assets from coast to coast. When you work with us, you’re family. Contact us today at (949) 519-3738 to learn more about how we can provide you with comprehensive and tailored insurance coverage.

dram shop laws

Dram Shop Laws & Liquor Liability

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Serving alcohol can be lucrative for a business and fun for a party, but it can also come with liabilities that must be addressed. There are certain laws that an alcohol-serving establishment must abide by as well as social host laws that a party organizer must honor. Both of these fall under the umbrella of dram shop laws, which are enacted to hold businesses and individuals liable for incidents that occur as a result of serving alcohol irresponsibly. If you offer liquor liability insurance to establishments that serve alcohol, you should familiarize yourself with dram shop laws.

What Do Dram Shop Laws Mandate?

Dram shop laws vary by state, but most mandate similar guidelines. These guidelines typically indicate that businesses are legally liable for irresponsible alcohol practices. Some of these practices may include serving minors, continuing to serve patrons who are visibly drunk, or overserving a customer to the point that they harm others. In any of these scenarios, the business that’s serving alcohol has violated the tenets of dram shop laws and may be held legally liable for any damage that results from their serving practices.

Who Is Subject to Dram Shop Laws?

Restaurants, bars, and clubs that serve alcohol are all liable under dram shop laws. Dram shop laws extend to any establishment that serves alcohol, even if it is not a regular practice. Many people don’t know that people can also be held individually liable for irresponsible serving under a social host law. Social host laws regulate alcohol that’s served in a private residence and include the same standards as laws governing businesses. Like servers are a restaurant, individuals can be held legally liable if they serve alcohol to minors or overserve guests to the point that harm results.

Who Can Sue Under Dram Shop Laws?

One of the unique features of dram shop laws is the ability it grants third-party citizens to initiate civil litigation against the business or individual that served alcohol irresponsibly. This means that if a person is a victim of a drunk driver and the driver was overserved at a bar, the victim is legally entitled to pursue damages from the bar or the bar’s server. Similarly, if a store clerk sells alcohol to a minor, that clerk can legally be held liable for their actions in court.

How Can Establishments Be Compliant?

Establishments and individuals can avoid a dram shop lawsuit by simply practicing safe alcohol serving. Servers should always be attentive to patrons’ level of inebriation and prevent drunk patrons from getting behind the wheel. Party hosts should display similar responsibility in monitoring guests’ alcohol intake. Paying attention and refusing to overserve drunk guests can prevent most of the accidents and damage that would result from irresponsible serving.

About Coastal Oak Insurance Services

Coastal Oak Insurance Services serves clients throughout Southern California. As an independent insurance agency, we have the liberty to connect with clients one-on-one and find customized coverage that meets their needs. Our impressive portfolio of policies includes coverage for businesses, farms, commercial auto use, and several specialty insurance programs, too. Reach out to us by calling (949) 519-3738, and let us help you find the right policy.

liquor liability

The Need for Any Restaurant to Carry Liquor Liability

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Restaurant owners know that the hospitality industry is faced with numerous liability risks. These risks are only compounded when restaurants and nightclubs serve alcohol to their guests. To protect financial assets, liquor liability insurance is a critical risk management component for restaurant owners. What is liquor liability insurance, and why is it so important? In this guide, we will explore how this insurance coverage is a valuable addition to the risk management toolbox.

What is Liquor Liability Insurance?

Liquor liability insurance is a specialized insurance policy that protects any business that makes, sells, or serves alcoholic beverages. The policy provides financial coverage for the medical costs, legal fees, and judgements or settlements associated with bodily injury or property damage caused by individuals served or sold alcohol by a covered establishment.
Any business can benefit from this insurance protection, including:
• Grocery stores
• Liquor stores
• Breweries and distilleries
• Restaurants
• Taverns
• Nightclubs
• Convenience stores

When reviewing insurance coverage options for your clients, you may be asked about “host liquor liability”. This is a specialized insurance coverage for business owners who do not manufacture, sell, or serve alcohol, but who allow patrons to consume their own alcoholic beverages on restaurant premises. Just like liquor liability insurance, host liability policies provide financial protection against bodily injury and property damage resulting from alcohol-related incidents. In some cases, host liquor liability is included as part of another insurance policy, such as general liability or business owners’ policies.

Why is Liquor Liability Insurance Needed?

Incidents related to alcohol are a huge problem for restaurants and bars serving or selling alcoholic beverages to their guests. According to the National Institute on Alcohol Abuse and Alcoholism (NIAAA), a division of the National Institutes of Health (NIH), alcohol-related incidents cost the United States over $249 billion in 2010, and the economic toll has only grown higher. The cost includes all injury and property damage incidents, not just those resulting from the manufacture, sale, or service of alcohol by businesses. Nevertheless, restaurant owners may face steep expenses – even millions of dollars in legal fees and settlements – if a patron were to cause injury or property damage as a result of drinking alcohol on restaurant premises.

Complicating the issue of liquor liability is the fact that restaurant and bar employees may not know a patron is dangerously intoxicated until an incident occurs. Perhaps a restaurant guest consumes alcohol with dinner, then causes a vehicle crash on the way home. That patron may not have appeared visibly intoxicated while on restaurant property, yet restaurant owners and staff may still be held liable for the actions of the patron even after he or she leaves the premises. In these cases, liquor liability insurance can protect the business from financial ruin.

General Liability vs. Liquor Liability

Most restaurant owners manage risks by carrying some form of general liability insurance. General liability coverage is designed to protect business owners from common operational and liability risks. Unfortunately, this insurance may not be sufficient to cover incidents involving the consumption, sale, or distribution of alcoholic products. In fact, a number of general liability policies specifically exclude coverage for alcohol-related liabilities. Restaurant owners must carefully evaluate their existing insurance coverages and purchase stand-alone liquor liability insurance policies or endorsements to existing coverages. One incident involving an intoxicated patron – a fight, a vehicle collision, a slip and fall injury – can result in hundreds of thousands or even millions of dollars in property damage and medical care for affected individuals. With liquor liability insurance, restaurant owners gain valuable protection against unexpected risks associated with the sale or service of alcohol.

About Coastal Oak Insurance Services

At Coastal Oak Insurance Services, we strive to protect your personal and business assets from coast to coast. When you work with us, you’re family. Contact us today at (949) 519-3738 to learn more about how we can provide you with comprehensive and tailored insurance coverage.