Passage of I-1183, Private Distribution and Liquor Liability: Are you Covered?

With the recent passage of I-1183, the state liquor privatization initiative, and the upcoming holiday season, it is prudent for both private and commercial entities to reevaluate their general liability insurance policy to include an indemnification clause for Liquor Liability coverage. Beginning June 1, 2012 the private sector can start selling spirits with the appropriate business license. There are currently 328 state-owned liquor stores in Washington that will be replaced with a projected 1,400 private ownership stores. Now is the time to be proactive and mitigate future potential risk by becoming well-versed in the liquor laws of Washington State; RCW 66.44- Washington Alcoholic Beverage Control. Awareness and protection are the first steps in preventing a financially crippling claim.

What could happen?

While you cannot control what others do, you can protect yourself. As a commercial vendor you are responsible to uphold a “duty of care” and are liable under the common law negligence-Dram Shop Liability, for serving alcohol to minors or patrons who are clearly intoxicated. If your patron leaves your establishment and is involved in a car accident that damages property or injures another, you could incur financial penalties, jail time, or a civil law suit. Perform your due diligence today and prepare your workforce for the added liability involved with the selling of spirits.

Liability isn’t exclusive to commercial vendors. Are you planning a holiday party this year? Do you understand your responsibility to your guests as a homeowner or property owner? Washington State has Social Host Liability laws which dictate a “duty of reasonable care” in furnishing alcoholic beverages to your guests. This law contends that the host may be held accountable if they serve alcohol to a minor or a guest damages property or injures a third party. Check your indemnity coverage before you throw your next bash and follow all necessary precautions to ensure your guests and property remain safe.

How can you protect yourself?

Dram Shop Liability:

Prepared by: Christine Drake, Bridge Comunications Consulting LLC pg. 1

Commercial vendors will want to develop a robust corporate policy around the selling and distribution of alcoholic beverages. The following recommendations are a step in the right direction:

Implement a mandatory employee training initiative that includes safety protocols for recognizing intoxication and intervention procedures.

Require identification checks to avoid serving alcohol to minors. Avoid buy-one get-one-free promotions or considerably

underpriced drinks that encourage binge drinking. Include a variety of non-alcoholic drinks and appetizers on your

menu as a safer alternative. Call a taxi for your patrons who are clearly intoxicated or call the

authorities. Better to be safe than sorry. The life you save could be your own or one of your employees.

For additional training tips review Get Tips from Health Communications Inc., a global leader in education and training for serving alcohol.

Social Host Liability:

As the host of a private party you will want to be informed, prepared, and protected. The recommendations below will help you keep your guests safe:

Consider hiring a professional bartender who is licensed and bonded.

Avoid self-serve bars that encourage increased consumption. Establish clear alcohol serving times. Expand drink menu to include a variety of non-alcoholic

beverages. Learn how to recognize the signs of intoxication. Require guests to check in their car keys at the beginning of the

party and establish a check out system. Prepare a guest room for someone to stay the night or offer to

call a cab.

Next Steps:

The first step in risk management is awareness. What you don’t know can hurt you! Many wholesalers, distributors, importers, and manufacturers of spirits do not recognize their risk or that their current insurance policy does not have an indemnity clause for Liquor Liability coverage. This puts them at significant risk for catastrophic loss. Our risk management consultant experts at Parker | Smith | Feek can offer you piece-of-mind and prepare a comprehensive indemnity plan to protect your assets. Contact Parker | Smith | Feek today to discuss your coverage options.

Prepared by: Christine Drake, Bridge Comunications Consulting LLC pg. 2

Founded in 1937 by Charles C. Parker, Parker, Smith & Feek is one of the 100 largest insurance brokerage firms in the nation. Privately owned and headquartered in the Pacific Northwest, the firm has world class resources with global reach. Our primary focus is the protection of our clients’ assets. And, to that end, we offer business insurance solutions across multiple industry sectors. From employee benefits and surety to claims management and workers’ compensation, our insurance and risk management knowledge and service expertise are unmatched.

Prepared by: Christine Drake, Bridge Comunications Consulting LLC pg. 3