Under-Aged Service and Over-Indulged Customers: Why Your Brewery Needs Liquor Liability Coverage

“Liquor liability is among the three most severe craft brewery losses,” said Richard Beall, the principal of Beall Brewery Insurance.

“All it takes is one lawsuit to drain a brewery’s reserves — if that brewery doesn’t have the right protection.”

That protection would be, logically enough, liquor liability insurance, and no brewery should be without it.

“But wait,” you may be thinking. “Our brewery already has liability insurance, so we’re fine.”

Not so fast! Yes, your brewery probably does have general liability insurance that offers protection if, for instance, a patron slips and falls on a slick brewery floor. But alcohol-related claims are a different story, and, most often, are not covered under a general liability policy.

Maybe you’re saying to yourself, “We have liquor liability coverage. No problem here.”

You may be right, or you may be mistaken in believing your brewery has sufficient coverage to protect the business if you end up embroiled in a lawsuit.

beerweb2

Liquor liability claims result when a patron has too much to drink and gets involved in an incident where people or property are injured. Because these claims tend to be larger than other types, your coverage limits can make a big difference.

Beall Brewery Insurance works with craft breweries across the country, from start-up microbreweries to regional craft breweries with multi-state distribution. And while they all have liquor liability coverage, the coverage limits can vary. A nanobrewery may not need as high a limit as a regional brewery with multiple tasting rooms.

Consider two ends of the spectrum: a Nevada woman filed suit against the mammoth Coors Brewing Co. and one of its distributors in the wake of her son’s fatal traffic accident, contending that Coors does not protect youth from drinking. Then there’s the regional brewery that was cited for selling alcohol to minors, which local police discovered in a decoy operation.

“A craft brewery needs the coverage to protect itself, but the best case scenario is that the brewery avoids the exposure in the first place,” Beall points out. “Good brewery policies and good employee training are the keys to avoiding liquor liability claims.”

A thorough policies and procedures manual should convey the brewery’s corporate policy about identifying, assisting and stopping patrons who have had too much to drink, as well as the importance of carefully checking IDs to prevent underage service.

Training ensures that brewery staff are knowledgeable on liquor liability issues, and that they’re prepared to help the brewery avoid any liquor liability incidents, and to keep customers safe. Training can take place at the brewery or off-site in a paid program such as LEAD (Licensee Education on Alcohol and Drugs) or TIPS (Training for Intervention ProcedureS). Some carriers make it even simpler. The Hanover, for instance, has negotiated a low-cost, web-based training program for craft breweries insured with its craft brewery insurance package.

“It’s important for craft brewery staff to understand that this training is a benefit to them personally, as well as to the brewery itself,” Beall said. “Anyone involved in serving alcohol could potentially be held liable for damages or injuries in which alcohol is found to be a contributing factor.

“That means the taproom employee could be liable if he’s found to have served someone past the point of intoxication — and the brewery owner could be found liable as well.”

And, of course, thorough training in the signs of intoxication; techniques for ending service for a patron who has overimbibed; and how to preserve guest safety can also protect the customers themselves, and those they come into contact with after leaving the brewery.

“The fact is, we live in a litigious society, and it’s not unusual for small businesses to be sued,” says Beall, who has been helping business owners protect their companies for more than 25 years.

“With the right liquor liability insurance in place, and thoroughly trained employees, a craft brewery can really stay on top of liquor liability exposures, which could damage the business for years to come.”

 

Elisabeth Deffner is the Vice President of Bizability Group. This segment was a promotional Brew Talk from the September/October 2016 issue.

Leave a Reply

Your email address will not be published. Required fields are marked *