Are We Liable? Managing the Risks of Liquor
Welcome back to guest blogger Leslie White, CPCU, ARM, CIC, CRM, Croyden Consulting, LLC. In this excerpt, Leslie offers tips on the managing risks of serving liquor at an association event. (Read full article here.)
What happens if someone attends your event and then causes harm to another or themselves? What if someone under the influence of alcohol gets into a fight or automobile accident, trashes a hotel room or other facility, causes a fire, or drives a vehicle into a building? What is your liability?
Every nonprofit organization struggles with the gamut of risks and liabilities of serving alcoholic beverages at its events. The organization’s potential liability arises from the serving or furnishing liquor that (1) causes or contributes to the intoxication of a person; (2) furnishes liquor to a minor or person under the influence of alcohol; or (3) violates alcoholic beverage laws, statues, or regulations. However, liquor liability exposure varies by state and depends upon the state’s legislation, court precedents and common law interpretations. (Read full article for more on the various levels of state liquor liability laws).
So now what do you do about your liquor liability exposure? Risk financing (insurance) provides a funding source in the event of a loss. Your general liability policy is the first place to look, and your insurance agent can help you interpret your policy’s coverages and exclusions. (Read full article for more on liquor liability insurance and insurance implications.)
Having the proper insurance coverage is important, but using good risk management techniques is even better. Here are some strategies to manage the liquor liability risk.
- Research the liquor laws in the state where the event will be held and in your home state to evaluate your exposure. Then meet any requirements for licenses or permits.
- Transfer the risk to the hotel, restaurant, caterer or professional bartenders by having them provide and serve the alcoholic beverages.
- Consider the type of alcoholic beverages to be served (alcohol content);
- Avoid open bars as a means to limit consumption;
- Control the serving size of drinks — don’t serve beer in 32 oz cups;
- Control the number of drinks a person can have at one time (drink tickets);
- Close the bar at least 1 hour before the end of the event;
- Serve food, preferably more than just hors d’oeuvres;
- Establish controls to prevent serving minors (wrist bracelets, hand stamps, restricted areas); and
- Arrange with a local transportation company to provide rides for impaired guests.
Alcohol is a part of American society but increasing attention is focused on its responsible use. If your organization provides alcoholic beverages at any of its events you need to manage that risk. First learn the liquor laws and regulations applicable to the appropriate state(s), then make sure you have the appropriate insurance coverage. Last and perhaps most important is to serve alcoholic beverages in a responsible manner to strive to minimize the risk of a guest harming another or themselves. No organization needs the trauma of someone getting hurt following an event.