As the owner of a bar, restaurant, hotel, casino, cruise line or other on-premises operation, responsible serving should be a key element of the business philosophy. The phrase “responsible serving” is generally defined as an alcohol industry employee’s ability to recognize signs of a patron’s excessive drinking while serving alcohol in a professional and reasonable manner and providing utmost customer service.
Most states prohibit practices and promotions that encourage the excessive consumption of alcohol. Some states, cities and counties prohibit or limit Happy Hours and promotions such as hotel packages, all-you-can-drink offers and two-for-one drink deals.
Further, most states have dram shop laws that impose liability on licensed establishments that knowingly sell and serve alcohol beverages to underage persons, habitual drunkards or visually intoxicated persons who subsequently cause injury to third parties or property, as a result of alcohol-related incidents. To reduce liquor liability risk, licensed retail businesses should consider implementing all the following mitigating strategies.
1) Document and regularly update alcohol-related operating policies.
Most on-premises operators have alcohol-related policies, but not all put these policies in writing. It’s important to document alcohol-related operating policies because it ensures awareness and consistent application.
Written alcohol-related operating policies should include the following topics and procedures: incident reporting systems; screening minors; identifying fake identification; recognizing and preventing service to intoxicated persons and habitual drunkards; understanding how and when to refuse service; and consumption of alcohol by employees.
Once you create a printed alcohol-related operating policy document, periodically update these written policies. Enlist the help of knowledgeable legal counsel practicing alcohol beverage law, to ensure compliance with state and local alcohol laws and policies. For example, state and local laws vary with regard to the age minimum for bartenders and service staff, drink-promotion restrictions and the dram shop liability standard.
2) Routinely review best practices and policies with all employees.
Restaurants should review written policies, best practices and expectations with employees on a scheduled basis, including before large events. These internal training sessions should inform employees of the importance of responsible alcohol service, both as it relates to the business’ philosophy and as it relates to governing state and local laws.
You should also conduct a thorough review of state and local laws, including dram shop laws and Happy Hour laws, highlighting the consequences of not complying with laws or business policies. Employees should know how to handle and communicate to management situations or issues involving the service and sale of alcohol, such as the identification of and refusal to serve drinks to minors or intoxicated persons.
All new employees should participate in a mandatory internal training to review written alcohol service policies and expectations. This program can be more in-depth than the regularly scheduled training for all employees.
After they complete this mandatory training, new employees should be required to sign an acknowledgment form that they understand state and local beverage laws and the establishment’s responsible-serving policies and procedures. Training employees on responsible serving and risk mitigation is not a one-time undertaking.
3) Require bartenders and service staff to complete a responsible service certification program.
Several states mandate certified server training. Even if a licensed business is not located in a state that requires certified server training, a company should require its employees to complete a responsible service certification program.
Operators that can demonstrate that its staff holds the appropriate certification may benefit from a substantial discount on liquor liability insurance policies. They can also potentially reduce or eliminate liability or penalties related to alcohol-related lawsuits.
4) Obtain appropriate liquor liability insurance.
While some on-premise businesses prioritize and successfully implement strategies of risk management, such companies are not completely immune to alcohol-related lawsuits. Most on-premise operators have purchased a general liability insurance policy. But these policies do not cover alcohol-related incidents, such as dram shop lawsuits.
All businesses that sell and serve alcohol drinks to patrons for on-premises consumption must consider obtaining a liquor liability insurance policy. These are usually sold as a separate policy; costs vary by state and by insurance carrier.
It’s also important to understand the types of claims that are covered and expressly excluded from a liquor liability insurance policy. Operators should ensure that the selected liquor liability insurance policy includes, rather than excludes, certain features, including, but not limited to: assault and battery claims, mental injury damages, defense costs outside the policy limit, and coverage of employees as patrons.
The sale and service of alcohol beverages brings great profits along with great responsibility. Serving responsibly is the best policy for all on-premises retail businesses and should be diligently practiced by all bar/restaurant team players.
Hannah Becker is an associate attorney and member of the Nationwide Alcohol Beverage & Food Law Department at GrayRobinson.