Liquor Liability – is special coverage needed?
Any person or business entity that sells or furnishes liquor to a guest has a civil and legal duty to do so responsibly. That legal duty is spelled out in various “dram shop” laws passed in 43 states and in court decisions that guide the other states. A “dram shop” is traditionally a business that serves alcoholic beverages by the “dram,” which is a British unit of measure. These laws protect the public from the irresponsible sale of alcohol to underage or intoxicated people. Although the laws only apply to purchase alcohol, similar standards may be applied for tort lawsuits alleging the wrongful serving of alcohol that leads to injury. There are two categories of liability exposure – “liquor liability” for those in the business of selling alcohol and “social host liquor liability” for those not in the alcohol business but who host a party or event where alcohol may be served or provided for free.
Special Event Liability – if you are hosting a party and don’t have Personal or Commercial Liability coverage then you can purchase a separate policy for Special Event Liability. Premiums range from $75 to $125 for personal parties and $300 to $750 for business parties
Hosting a Party with Alcohol-There is a special area of negligence called “host liquor liability”. In short, if you provide alcohol to guests, the chances of injury or damage increase. You may be held responsible for injuries or damage caused by intoxicated guests, even after they leave your premises. The best way to protect yourself is to hire a professional bartender, and ask them for proof of insurance.
What if your party is not at your home? It doesn’t matter; if you are the host or organizer of the party, you can be found responsible.
What if your party is BYOB? You’re still not off the hook. If you allow people to consume too much alcohol on your premises, or allow them to leave while drunk, you might be found responsible for the consequences. Needless to say, if you allow minors to consume alcohol, you can be subject to criminal law and penalties, not just negligence law.