Preventing Liquor Liability Claims Before They Happen

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Does your craft brewery have a spare $1 million that you could afford to lose?

When it comes to liquor liability risk exposure and claims, that’s a question you must consider carefully — and with the expert advice of your brewery insurance agent.

“From a severity standpoint, liquor liability is the leading exposure for a craft brewery,” said Richard Beall, principal of Beall Brewery Insurance.

“The best defense for liquor liability is to prevent a claim in the first place,” he added. “But there are a number of other steps craft breweries can take to try to prepare their defense in advance — in case they do face a liquor liability claim.”

Keep a digital eye out. Surveillance camera footage can be invaluable, recording patron behavior and time-stamping arrivals and departures. Because liquor liability claims can take a while to be discovered, it’s important to retain surveillance footage for at least three years.

Write it down. Train tasting room bartenders and servers to log all incidents as soon as they happen. Workers should describe the incident in as much detail as possible, including the time in and time out of the patron.

Hold on to that paperwork. In addition to retaining your incident log and surveillance footage, make it a policy to keep sales or credit card receipts, as well as servers’ work schedules, for at least three years.

“Wait a minute,” you may be thinking. “Can filling up our files with all this stuff really do us any good?”

Absolutely. Take the case of one brewery tasting room where a couple of patrons spent a few hours in the early evening. After leaving the brewery, they went on to a bar or two, and then hit the road — and another car.

The car crash, which caused a severe injury, occurred at midnight. Because the craft brewery had the patrons’ credit card receipt, the business was able to show how much the pair had drank at the brewery — and how early in the evening they had left. The case, which resulted in a payout of more than $1 million, did much less damage to the brewery than it otherwise might have: because of that documentation, the brewery was found to be responsible for just 20 percent of the total claim.

“When I think of liquor liability claims, I think big money right away,” said Jim Lassen, who heads the craft brewery program for The Hanover Insurance Group, Inc., one of the leading writers of craft brewery insurance in the country.

“That’s why it’s so important for craft breweries to ensure they have sufficient liquor liability coverage — and to consider an umbrella policy, which they might need if they face a large claim.”

A brewery insurance expert like Beall, who has been in business for 30 years, knows exactly what types of coverage limits to recommend to his brewery clients. And he can offer exactly the right package from exactly the right carrier.

“We tailor the coverage for the exposure,” said Beall.

Beall Brewery Insurance also helps clients understand the value of employee training to avoid liquor liability claims — whether LEAD (Licensee Education on Alcohol and Drugs) or TIPS (Training for Intervention ProcedureS) or even The Hanover’s low-cost, web-based training program for craft breweries insured with its craft brewery insurance package.

“Servers are the first line of defense,” Beall pointed out.

It’s vital for servers to feel empowered to cut off patrons who appear intoxicated, to feel comfortable calling in management (or even the police, if necessary) to deal with unruly patrons, and to offer to call a ride service for patrons who may be too intoxicated to drive.

“Sufficient liquor liability coverage is vital to protect a craft brewery,” added Beall, “but insurance helps after the fact.

“The best way to deal with liquor liability claims is to train staff, and establish policies and procedures, to prevent them from happening in the first place.”

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