Protect Your Small Business From Liquor Liability – A Comprehensive Guide.
Liquor liability is a serious concern for small businesses in the hospitality and entertainment sectors. In order to ensure that all legal obligations are met, proprietors must understand the various types of responsibility associated with serving alcoholic beverages. Below, we discuss dram shop laws, social host liability, statutory limits on liability, bona fide defense exclusions, and intoxication and underage drinking issues.
Dram Shop Laws
Dram shop laws impose civil or criminal liabilities on establishments that sell or serve alcohol to individuals who later cause injury or death as a result of their intoxication. These laws can be found in many forms across the United States but generally define under which circumstances an establishment may be held liable for damages caused by an intoxicated customer or patron. For example, they may specify whether liability extends when an individual is served alcohol even if they are already visibly intoxicated.
Social Host Liability
In addition to dram shop laws, social host liability laws have become more frequent in recent years. They typically hold both individuals and establishments responsible for hosting events where minors consume alcohol with or without their knowledge or consent. Establishments must exercise caution when hosting such events as any underage drinking could incur penalties ranging from fines to civil lawsuits.
Statutory Limit on Liability
Many states also enforce a “statutory limit” on liquor liability which states that no more than two patrons can be held responsible for damages incurred due to excessive consumption of alcohol at a single establishment in one evening. This means that if three people become intoxicated together at a bar or restaurant and injure someone else later that night, only two persons will be held liable for the resulting damages. The third person will not be subject to any potential claims brought against them in court because of this statute limit.
Bona Fide Defense Exclusion
In some cases, a state may offer measures of protection called “bona fide defense exclusions” which protect establishments from being held liable when they act within reasonable parameters when determining whether to deny service to an individual due to possible intoxication levels. Proactive measures like asking customers questions about their plans before serving them can help reduce the chances of a lawsuit being filed against the business owner later on down the line if something goes wrong with those patrons later that night—even if it turns out they were indeed legally intoxicated at some point during their visit.
Intoxication and Underage Drinking
Finally, it is important for small businesses owners to remember that while it is ultimately up to them whether they wish to serve guests who appear visibly intoxicated or those underage, doing so comes with significant risk regardless of state-specific statutes regarding liquor liability protections. Intoxicated individuals can often make poor decisions which lead to unfortunate consequences—both financially and otherwise—which could leave proprietors open to lawsuits even with predefined limits in place on behalf of their state government. Similarly, serving minors runs the risk of criminal charges being leveled against both individuals involved in providing service as well as against the business itself—putting owners between a rock and hard place should such situations arise unexpectedly during operations hours at their respective establishments due diligence should always be used when applicable in order prevent these issues from arising altogether whenever possible.