According to the National Highway Traffic Safety Administration (NHTSA), nearly 10,000 vehicle-related fatalities involve a drunk driver each year.
Not only are these people liable for their actions, if they were at your restaurant drinking beforehand, you may be liable for over-serving your customers.
And these types of lawsuits are costly.
Outback Steakhouse, for example, was ordered to pay $39 million by an Indiana jury after a customer of the restaurant chain struck the plaintiff with his car.
T.G.I. Friday’s was ordered to pay $1 million to the parents of two 16-year-old teenagers who were killed after being involved in an accident with a drunk driver. Witnesses claimed that the patron at T.G.I. Friday’s was drinking for 8 hours at the restaurant before the accident occurred.
These are just two of many examples of victims and their families filing lawsuits against restaurants every day for their role in serving a customer who is then involved in an alcohol-related accident.
In fact, more than 50 percent of first-time offenders of drunk driving were being served at a licensed restaurant or bar before getting into the car.
For that reason, it’s important that your restaurant has a liquor liability insurance policy to protect your restaurant, employees and customers.
What Is Liquor Liability Insurance?
Liquor liability insurance is designed to protect your restaurant if you sell or serve alcoholic beverages.
Specifically, liquor liability insurance covers any damages that results from someone who has consumed too much alcohol. This could include things like fights, careless behaviors or auto accidents to name a few.
If your customers were to sue your restaurant for damages related to their intoxication, your liquor liability insurance policy would protect you. It’s an additional insurance coverage that’s not included in your standard, general liability insurance policy.
Here’s the Top 4 Benefits of Liquor Liability Insurance:
- Liquor Liability Insurance Helps You Meet Your Legal Requirements. It simply allows your restaurant to meet legal requirements. If you sell or serve liquor, you may be legally required to carry liquor liability insurance. The strictness of the legal requirements differ from location to location. Where your restaurant operates has a major impact on how your liquor liability insurance is priced.
- Liquor Liability Insurance Protects You From Unruly Customers. An intoxicated customer could cause fights or other potentially dangerous situations. Liquor liability insurance is designed to protect your restaurant from these situations and is a must if your restaurant serves or sells restaurant insurance.
- Liquor Liability Insurance Can Reimburse You For Legal Fees. In the event that a liquor-related claim arises, legal fees and court costs can add up quickly. Without the right liquor liability insurance, your business could have to cover defense costs itself, which can be a huge financial burden for even the most profitable establishments.
- Liquor Liability Insurance Covers Your Employees. Even if you require your employees to serve liquor responsibly, there’s a chance they may misuse their judgment. Liquor liability insurance can cover your employees’ improper actions and better protect your restaurant from liquor-related incident.
Want To Learn More About Liquor Liability Insurance?
If your restaurant serves liquor, the best way to protect it from potential claims is through proper risk management and liquor liability insurance.
Let’s review your overall restaurant risk management and insurance program. I’m Pat O’Neill a risk advisor at The O’Neill Group, and I’d be happy to help you identify the risk exposures your restaurant faces, and secure for you the right restaurant insurance program. Call me at (330) 334-1561, email me at email@example.com or click here to schedule a time on my calendar that’s convenient for you to discuss cyber insurance.This article was adapted from Zywave’s Restaurant Risk Insights: Managing Your Liquor Liability Exposure. This is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.