By Howard Beck, CPCU, AU
Chief Underwriting Officer
Illinois Casualty Company

The liquor liability line of the insurance business has always been difficult.  Many carriers are reluctant to offer this product and even fewer are willing to make a commitment to it.  Since COVID, plaintiff’s attorneys have become increasingly creative and aggressive while juries cooperate with head scratching awards.  This combination of factors has caused a few traditional liquor liability carriers to withdraw from certain states or from offering liquor liability insurance completely.  The situation has reached a point in some states where bar owners are closing their doors because they can’t obtain insurance or afford the limited options that are available (e.g., South Carolina).

As the challenges increase across the country, license holders grow increasingly frustrated and feel that the situation is totally out of their control.  They actually have more control than they think if they are willing to view risk management differently.  With this mindset, they can control, and even lower, their liquor liability insurance premiums.

So, what does this mean for you, your employees, and your business? Here are some considerations on how to take control of your liquor liability insurance costs.

We work in an industry where people drink and often drive.  Sometimes those customers get into accidents, and innocent people get hurt.  When that happens, the insurance company takes over, investigates, applies the policy to the law, and strives for the most favorable financial outcome.

The best way to control the cost of liquor liability insurance is to do everything possible to prevent claims.

The next best way is to do everything possible to enable the insurance company to defend you.

How do you minimize the chance of a liquor liability claim?

• Make a true commitment to responsible serving!
• Train your staff repeatedly and consistently.
• Create a culture among your staff to recognize signs of intoxication and collectively cut off service effectively.

If there is a claim, how can you help the insurance company defend you?

• Invest in security cameras and long-term storage of recorded images.
  • Plaintiff’s attorneys will paint a very different picture of what happened.
  • Video doesn’t lie.
• Have documented procedures in place that detail your commitment to training your staff and not over-serving customers.
• Have a reputation for running a good business.

Recently, ICC settled a claim involving a patron who slipped on the stairs and faceplanted in the landscaping, suffering a broken nose and some broken fingers.  The establishment was sued for negligence. The patron claimed that the stairs were unsafe and demanded $150,000 as compensation for his injuries.

Fortunately, the business saved a video recording of the incident, which showed the patron fumbling in his pocket for his keys and failing to watch where he was walking.  Prior to trial, the case was settled for less than 10% of the demand.  Having recorded images of the incident made a huge difference in the negotiations, final settlement, as well as the claims history for the insured.

Plaintiff’s attorneys go after the easy money.  Businesses that don’t make these commitments are the desired target.  Avoid the claims, but if you have one, do everything possible for the insurance carrier to properly defend you and minimize the impact.

There are resources available to you through ICC or the Pennsylvania Licensed Beverage & Tavern Association.  We are here to help. Contact the Association or your agent for more information.

 

Editor’s Note: Illinois Casualty Company is the exclusive preferred vendor for liquor and business liability insurances. Qualifying Members can save up to 10% on their businessowners and liquor liability insurance. To find out more about these insurance programs and to locate an agent in your area, visit www.ilcasco.com/insurance-programs.