Blurred Lines Around Liquor Liability Create Hangovers
Alcohol doesn’t just create liability exposures for bars and dram shops. Almost every type of commercial and personal risk in an insurance carrier’s book can be the source of a liquor liability claim. Dram Shop and Social Host liability rules are complex, and carriers are finding that more care is needed when underwriting all risks with liquor exposures.
Here are just a few of many recent trends: bars are being found liable for ejecting uncooperative patrons or for criminal acts committed “off premises”; circumstantial evidence is being accepted as proof of intoxication; and grocery stores, convenience marts and other sellers of closed containers are now subjected to the same liability standards as taverns serving drinks.
Social host liability concepts are newer and still expanding. Although most states only permit actions against homeowners when alcohol is furnished to minors, some counter-intuitive legal interpretations have made hosts more vulnerable. In Tennessee, plaintiffs successfully argued common law negligence even though the state had rejected a social host liability statute. The court accepted the argument that the plaintiffs could rely on a parent’s promise to monitor the party. Social host liability can even extend to business lunches with a lot of drinks, as we saw in one recent New Mexico case.
It’s another example of why carriers need to keep liquor in mind when writing liability - or they may end up with a bigger hangover than expected.
Read our Insurance Issues publication to find out more.