Risk Management for the Food Service Industry

Chapter 4: Managing Risks as a Food Business Owner
Part 3: Tips for Limiting Liquor Liability Lawsuits

Consider this scenario: it's a weekday at your tavern. A man sits down at the bar and orders a White Russian. All evening long, the man throws them back, drink after drink, and your bartender keeps serving him even though his speech is slurred and he struggles to stay upright on the stool. After leaving the tavern, the intoxicated patron loses control of his car, drives on a sidewalk, and kills a pedestrian.

Or let's say you're catering a corporate event where alcohol is served. Your bartender doesn't notice that he's over-served an attendee. Unfortunately, that person climbs behind the wheel at the end of the night and drives straight into oncoming traffic. As a result, the intoxicated driver dies.

In both scenarios, the surviving family members could sue your business for dram shop liability (depending on where you live). So how do you ensure these costly court battles don't land on your doorstep?

If you don't want to eliminate the sale of alcohol, you have to take other precautions to reduce your liability exposures. Here are some tips that can keep your business better protected:

Ensure Your Servers and Bartenders Are Trained in Safe Alcohol Service

Part of your employees' training should involve becoming certified to serve or sell alcohol. Your state may even mandate this kind of training. For training and certification programs, check out the Training for Intervention ProcedureS (TIPS) website.

The goal of this kind of training is to teach servers what their legal responsibilities are when it comes to alcohol service, how to recognize and prevent intoxication, and how to handle guests who have overindulged.

Promote Safe Alcohol Consumption

Hang signs around the bar that encourage patrons and attendees to exercise good judgment when it comes to their alcohol intake. Placards on the bar that read "Drink Responsibly" can reinforce the idea that your establishment is not interested in over-serving its patrons.

Create Protocol for Handling Intoxicated Guests

If it becomes obvious that a patron or guest has overindulged, your employees will need an established policy for handling that person. For example, you may recommend that they first stop serving the guest.

Next, they might ask for the patron's keys, call a cab, or try to arrange a designated driver. If the intoxicated guest resists or becomes aggressive, a manager or bouncer should escort them outside the establishment.

Purchase a Liquor Liability Insurance Policy

Though a Liquor Liability policy will not eliminate the risk of liability suits, it does give your food business a last line of defense if a claim occurs. If you are sued for a Liquor Liability claim, your insurance provider can cover your legal defense fees, damages related to the liquor-related accident, and other court costs.

As we mentioned earlier, all policies come with different inclusions and exclusions. Be sure you choose one that covers assault and battery claims, as these are the most prevalent lawsuits when it comes to dram shop liability.

A final note: your coverage will not protect your business if you serve alcohol to minors. Which brings us to our next point.

Card Everyone

No matter what age your patrons or attendees appear to be, do not allow employees to serve a drop until drivers' licenses have been displayed. Under no circumstances should a minor be served alcohol.

Prevent Your Patrons and Guests from Overindulging

Maybe the best way to reduce your liability exposure is to discourage overconsumption when feasible. For example, you may limit the timeframe for happy hour specials. Also, you'll want your bartenders and servers to encourage patrons to eat with their drinks. Eating decreases the pace of drinking and slows the process of alcohol absorption. Employees should not serve a customer another libation until their previous drink is gone.

Quick Tips for Preventing Intoxication

  • If you run a catering business, ensure drinks are served to guests rather than self-served.
  • Don't price alcohol too low. People will be more inclined to drink heavily if they don't have to think about cost.
  • Provide a range of low-alcohol drinks, such as beer or wine. Also, be sure to provide nonalcoholic drinks.
  • Offer food items. If you have a happy hour special, consider marking down food, too, to encourage patrons to eat with their drinks. This will slow the rate of their alcohol absorption.
  • Insist that your bartenders use jiggers to measure spirits.
  • Only allow a person to buy one drink at a time.
  • Ensure that only authorized employees have access to the bar.

Next: Conclusion & References

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