8 things you NEED to know about Liquor Liability in New York State.
Do you need Liquor Liability Insurance in New York?
Recent court decisions and increased state regulations and laws hold vendors of alcoholic beverages increasingly responsible for a host of damage claims under liquor liability laws. Take for example this true situation
On a Monday night, a patron at a local bar became intoxicated, the patron was ejected from the bar. However, in his drunken state, he tried to enter several other local bars. The intoxicated patron was denied service at each subsequent venue by bartenders although the intoxicated patron had been in each establishment since no doorman was on duty. Not long after being denied service multiple times, he started an altercation with another person outside any of the establishments. In the scuffle, both the intoxicated patron and the other man were seriously injured. A lawsuit was filed against all of the establishments! Each had to defend their establishment through a lengthy court case to prove they had NOT served the patron.
Liquor liability insurance is business insurance that protects your business against loss or damages claimed as a result of a patron of your business becoming intoxicated and injuring themselves or others as illustrated in the real life example above. If your business manufactures, sells, serves, or facilitates the uses or purchase of alcohol, then your business needs this coverage.
New York Sate operates under the Dram Shop Act, which establishes the liability of establishments arising out of the sale of alcohol to visibly intoxicated persons or minors who subsequently cause death or injury to third-parties (those not having a relationship to the bar) as a result of alcohol-related car crashes and other accidents.
You may wonder who needs this type of insurance. Of course bars, night clubs and taverns come to mind first. However, other businesses may carry liquor liability as well. Some examples of businesses you would not readily think of include convenience stores, cafes and restaurants, country clubs, organizers of special events, and caterers. It is estimated by experts that only 35% of businesses that should have this coverage actually purchase this coverage. Part of this is because of misconceptions that exist in the hospitality industry regarding the industry's liability risks for intoxicated patrons. Don’t put your businesses future at risk! With alcohol related claims, it’s doesn’t take long to ruin a good business!
Liquor Liability 101
There has always been a great deal of confusion about the need for liquor liability - even among insurance professionals. Liquor liability laws vary greatly by state, and insurance policy coverage options are often confusing. Let our agent’s help you understand and determine your best options. Also, read some basic information on the subject here:
- “Dram Shop” Laws: hold alcoholic beverage servers financially liable for harm that visibly intoxicated individuals cause to other people, themselves, or property. These laws are established at the state level. They can apply not only to bars, liquor stores and restaurants, but also to social clubs and private events where liquor is served. Dram shop laws also include selling liquor without a license, selling liquor after hours, and selling liquor to minors.
- Liquor Legal Liability: provides coverage for bodily injury or property damage for which you may become legally liable as the result of contributing to a person's intoxication. This coverage is provided by a separate policy and will only cover establishments 'in the business of' manufacturing, selling, distributing, or serving alcoholic beverages for a charge. This exposure is not covered under a general liability policy.
What to look for/ask for in a liquor liability policy:
- Host Liquor Liability Insurance Policies: cover special events for businesses that elect to serve alcohol to their employees, prospects, and customers. This type of liability insurance is also needed by people and businesses serving or providing alcoholic beverages to customers, guests, or employees.
- Assault and Battery Coverage - Most claims against bars and restaurants are the results of fights. Your liquor liability policy should include coverage for assault and battery claims. If not, the policy has a much lower real value.
- Defense Costs Included – Retaining an attorney for any suit brought against your business will most likely be your greatest cost. Strong policies provide coverage of legal counsel services. Frankly, even with a lower premium, pass on the policy if it does not provide your business with skilled, appointed legal counsel that does not reduce coverage.
- Employees Included - If you serve, then employees will drink regardless of the rules. Weaker policies exclude employees from coverage. Make sure employees are covered as patrons.
- Damage Definition Includes Mental Damages - Claimants may claim they were damaged in non-physical ways: stress, mental anguish, or psychological damage. Some policies exclude these types of damages. Don't purchase a policy with limited damage definitions.
- Reduced Premiums Based on Safety and Claims – Partake in training of employees to receive discounts on premiums for having safety training and no claim history. With good training and a clean claim history you may be able to reduce your premiums by 15-20% for this basic safety training.
Putnam Record Insurance makes your liquor liability insurance process as simple as possible. By filling out a simple online form, our expert agents will shop the market for you and get the best possible coverage and competitive premiums. We pride ourselves on taking care of our clients and their interests.
Get your quote today!
What are you waiting for? Simply complete the Protection Savings Form for a free, no-obligation liquor liability insurance quote. The sooner we receive your information, the sooner we will get you the best protection for your alcohol-serving situation. So don't delay another minute - complete the form now.