Turner Padget Insights
Is Your Business Serving Up a Liquor Liability Cocktail?
Posted On Nov 24, 2014
As the holidays approach, it’s a good time for South Carolina businesses with liquor permits to review their liquor liability policies – both their insurance policies and their employee protocols. South Carolina courts have recently been cracking down on those that serve liquor to people who are intoxicated. Now more than ever there are practical, ethical and legal considerations for ensuring you are careful who you serve and how much.
Those holding liquor permits in South Carolina already know that they cannot sell alcohol to those who are younger than 21 or intoxicated. (see S.C. Code Ann. § 61-4-580.)
But these businesses may not be aware that the legal definition of “intoxicated,” for liability purposes, is somewhat broad. Even if a customer does not look intoxicated at the time of sale, if you know they had anything to drink before coming into your establishment, and you continue to serve them, you may be on the hook for the resulting actions of that customer (e.g., an accident or fight). The South Carolina Supreme Court held that a business may be found liable for the actions of a customer, even without evidence that the customer was visibly drunk. What’s more, a business owner may be personally liable for over-serving (plaintiffs may go after a business owner’s personal assets in addition to business assets). The costs can be staggering: the case in which the court made these findings upheld a $10 million verdict against the defendant bar and its owners.
What should you do to protect your business, your employees and your customers?
Alcohol Service Policy
Ensure you have clear protocols in place on alcohol service and ensure your servers are up to date on these protocols. These should include when to stop serving a customer and steps for handling an intoxicated person. Several trade associations have training programs and materials that can help you educate your servers.
Liquor Liability Insurance
Ensure you have adequate liquor liability insurance. A general liability policy probably is not enough because these policies commonly exclude damages that result from serving someone who is underage or intoxicated. You need supplemental insurance that specifically covers alcohol-related liability.
These are reasonably straightforward steps, but it is imperative that all liquor permit holders ensure they’re covered and being careful; the potential costs of inadequate measures are too costly to ignore. The last thing you to want to gift this holiday season is a serious accident or injury and the last thing you want to receive is a hefty lawsuit.
