Businesses that serve alcohol expect their employees or patrons to have a good time and act in a responsible manner. What they don’t expect, however, is to find out that they are liable for the actions of an intoxicated person. While the vast majority of businesses serve alcohol without incident, the harsh reality is that lawsuits related to liquor liability are filed each day. Making matters worse, all it takes is a single liquor liability claim to put your entire business at risk.
To help your business navigate the risks associated with serving alcohol, this guide will examine the concept of liquor liability and list steps businesses can take to mitigate their risks of facing a costly lawsuit or insurance claim.
Marshall & Sterling Insurance is here for you and your business. We are ready to help you design an effective risk management plan to limit your business’s liquor liability. What’s more, we can help you find the right insurance policy to protect your business’s bottom line.
What is Liquor Liability?
The term “liquor liability” refers to an organization’s legal and financial responsibility for the actions of a person who consumes alcohol at its establishment and the consequences of those actions. Under liquor liability laws, businesses can be held liable for bodily injuries and property damage caused by a person who was served alcohol at their establishment.
According to the Insurance Information Institute, liquor liability is not limited to those whose primary business is the sale of alcoholic beverages. Your business may have a liquor liability exposure if you do any of the following:
- Sell or distribute alcohol at your place of business
- Allow patrons or guests to bring their own alcohol and consume it that at your place of business
- Serve alcohol at an event you are hosting
- Allow others to serve alcohol at your venue
Who is at Risk?
When it comes to liquor liability, a wide range of organizations and individuals can face a lawsuit. Below are some of the most common defendants in alcohol-related lawsuits:
- Owners of restaurants, bars and nightclubs
- Owners of retail stores and convenience stores that sell alcohol
- Businesses and nonprofits that host company parties or social events
- Homeowners who host parties
- College and university organizations that serve alcohol
What Can Go Wrong?
When it comes to alcohol-related incidents, there is no shortage of things that can go wrong. Below is an overview of the wide range of injuries and damages for which a business can be held responsible for under liquor liability laws. These incidents can lead to costly judgments against your business, forfeiture of your liquor license or even criminal proceedings:
- Drunk driving incidents—Businesses can be held liable for the damages created by drunk drivers who were inappropriately served.
- Fighting—Fights and assaults are among the most common causes for liquor liability claims.
- Sexual assault and harassment—Businesses can be at fault if someone becomes intoxicated at their establishment or event and sexually assaults or harasses another individual.
- Trips, slips, falls and other accidents—If these incidents occur as the result of alcohol consumption, a business may face a premise liability claim.
- Alcohol poisoning—The overconsumption of alcohol is all too common. In some cases, overconsumption can lead to alcohol poisoning, a common source of liquor liability claims.
Mitigating Liquor Liability Through Risk Management
With all of the risks associated with liquor liability, some business owners may question whether it is even worth it to serve alcohol. While some incidents are unavoidable, a proper risk management program can greatly reduce the chances that a business will face a liquor liability claim. Download this Liquor Liability Guide to explore the aspects of a sound risk management program.