The term “dram” was coined from small alcohol measurements in the 18th Century and evolved to refer to bars and taverns that sold alcohol. Dram shop laws were developed to protect intoxicated customers and minors from being overserved alcohol. The laws state that if a bar serves an already intoxicated person or a minor alcohol, they are responsible for the harm caused by the drunk individual. Here is a detailed explanation of dram shop laws and how insurance for bars can protect your business:
What Are Dram Shop Laws?
A dram shop law is a statute that holds a bar responsible for the harm caused by intoxicated customers. The effect of this law is not based on strict liability but on negligence. This means that responsibility falls on an establishment that serves alcohol to a visibly intoxicated person who then causes harm to themselves or a third party because of the intoxication. This harm can include physical fights, pedestrian accidents, and vehicle collisions.
Which States Do the Laws Apply To?
In most states, only third-party victims are covered by these laws. Some states, like Pennsylvania, extend this coverage to first parties. This means the person who caused the harm can sue a bar for injuries they sustained while intoxicated. Most states also limit these laws to commercial bars, but in some states, like Maine, the liability extends to residential or social hosts. Each state’s dram laws are changed and updated regularly, so check those that apply in your jurisdiction. States like Delaware, Maryland, Virginia, Nevada, Kansas, Nebraska, South Dakota, and Louisiana do not have dram laws.
Some states extend these laws to cover minors. In California, alcohol establishments are only held liable if they serve alcohol to a visibly intoxicated minor. In Texas, if a bar serves alcohol to a minor who later causes an accident, the guardians can sue the bar for the harm caused. In Iowa and Arizona, dram laws apply when an employee serves alcohol to an already intoxicated adult or minor. Florida only applies dram law liability to establishments that overserve minors or habitual alcohol addicts. If you own a bar or restaurant in one of these states, insurance for bars can help protect you from dram law liability.
How Can Insurance for Bars Protect Your Business?
If you operate an alcohol business or regularly host social gatherings where you provide alcohol, insurance coverage can protect your establishment against dram law liability. Bar insurance can protect you if one of your staff members unknowingly serves a drink to an invisibly intoxicated person or minor. It can also help cover charges incurred by individuals who were driving while intoxicated and caused accidents that harmed other drivers, pedestrians, and passengers. These third-party victims can sue your business and demand you pay for all the damages caused, including hospital bills.
Lawsuits can bring significant financial losses to your business and may force some owners to shut down their businesses. With bar insurance, you can protect your business if a dram law liability accident happens. General bar insurance policies can help cover the costs of the lawsuit. Liquor liability policies cover third-party claims like falls, slips, fights, and sexual assault cases. It can also cover property damage for the victims but not for your establishment. Select a reputable insurance provider for help finding a policy that matches your bar’s needs.
Contact a Bar Insurance Provider Today
Dram laws can hold you and your employees responsible for serving alcohol to intoxicated persons or minors. Your business can be sued if intoxicated people from your bar cause accidents and harm to other people. Bar insurance can help cover the costs of a lawsuit if an accident does occur. Liquor liability insurance protects your business from claims that could harm your business’s reputation and finances. Bar insurance can also cover damages to other properties or minor health issues from fights or slips. Contact a bar insurance provider today to learn more about protecting your business from dram law liability.