Limiting social-host liquor liability.
Issue #10
June 11, 2007
If a bartender is legally liable for serving alcohol to a patron who becomes intoxicated and then injures a third party, is the exposure the same for a business if they host a social event where alcohol is served, such as an open house or employee picnic?
According to the Insurance Information Institute, liquor liability exposure is not just limited to those whose primary business is the sale of alcoholic beverages. Thirty-five states currently have social-host statutes or common law that holds private-event hosts liable for the actions of their guests. You are considered a social host if you provide alcohol to individuals in a non-commercial manner. It is important to know the law in your jurisdiction and to take the appropriate steps to control your risk.
Liquor liability program and coverage considerations.
An important first step in limiting your liquor liability is to implement a risk management program. The liquor liability program must have the support of management, be communicated to supervisors and employees, and include a policy advising employees to drink responsibly at company events.
The program should outline the procedures for handling intoxicated guests. This includes delegating who will assess and address the situation, such as hotel security or someone from your organization, and outlining appropriate actions for dealing with or removing a guest who has overindulged.
If an incident occurs, fill out a liquor liability incident report, which documents the measures taken to control an intoxicated person and helps your defense in the event of an alcohol-related accident.
In addition to proper liquor liability planning and education, review your company’s current general liability insurance policy to determine your coverage in social host situations. Remember, even with the proper coverage, a liquor liability policy does not eliminate your exposure if alcohol service is in violation of a statue, a minor is served, or an already intoxicated person is served.
It’s also important to have a program in place that includes the following recommendations when working with third-party vendors:
- When working with a vendor, such as a caterer or bartender service, verify they are licensed and insured.
- Stipulate in your vendor’s contract that only those who have received alcohol-awareness training should serve or sell alcohol at your event.
- Require the vendor to provide Certificate of Liability Insurance to include Liquor Liability coverage naming your company as Additional Insured.
Before your company hosts its next event, contact us. We can review your coverage and assist in developing a risk management plan that keeps safety at the center of your company-sponsored events.
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