1. DUIs: The most common type of liability claim stems from the over-service
of alcohol to patrons who then get behind
the wheel. There were 10,076 fatalities in
2013 from automobile accidents involving
a driver with a blood alcohol content of
.08 or higher; which accounted for 31 percent of the total traffic fatalities in the year.
Claims can also result from intoxicated
patrons operating boats or snowmobiles
after leaving the serving establishment,
and it’s not uncommon for an establishment to be named with other establishments in a lawsuit even when the patron
admits to having only one drink at an
insured’s bar. To transfer the risk of over-service related claims onto insurance, the
dram shop owner needs to purchase a Liquor Liability policy with adequate limits in
addition to a General Liability policy.
2. Activity hazards: Dram shop owners expect the occasional bar fight and
bloody nose, but what they might not
expect are broken ankles from falls off
the mechanical bull; head injuries from
falls out of the shot chairs, or facial burns
from the bartender’s flaming alcohol
trick. Claims arising out of these types
of activities may be covered under the
premise liability portion of a General Liability policy or the Liquor Liability policy,
but more often these unique risks are excluded. To make sure all activities occurring in the bar are covered, the insured
needs to carefully disclose them on the
insurance application so the agent can secure appropriate coverage. Typically, the
agent can add coverage for these activities
by endorsement for additional premium,
but the agent first needs to be informed.
The insured should then read the policy
to confirm for him or herself that no exclusions apply to the types of events that
can or may occur at the bar at any time
during the policy period.
Managing Liability for
Restaurant, Bar & Tavern Owners
From running the business, handling the purchasing and managing staff to attracting customers, a bar’s liability for an intoxicated patron isn’t always the first thing an owner considers.
However, being too busy to consider what liability risks are associated
with operating a restaurant or tavern will expose owners to risk or
even financial ruin. Assessing exposure and obtaining the appropriate
insurance coverage is as essential to a successful bar business as, well
— the beer on tap.
Restaurant, bar, tavern and lounge
owners are also known as “dram shop
owners.” Often they buy a General Li-
ability insurance policy simply to satisfy
their landlord’s lease requirements with-
out fully understanding that the stand-
ard General Liability policy does not
cover claims that arise out of the service
of alcohol. Thirty states have dram shop
laws which hold licensed establishments
liable for the selling and serving of alco-
hol to individuals who suffer injury or
death, or who cause injury or death of
others as a result of their intoxication.
These laws also commonly impose lower
thresholds of liability for the selling or
serving of alcohol to minors.
So what are the most common dram
shop exposures and how does a business
owner protect the business from loss?