Bars & Restaurants

by admin admin No Comments

Is Alcohol Awareness Training Necessary?

Is Alcohol Awareness Training Necessary?

Serving drinks may seem glamorous and fun, but it’s also serious business. When alcohol is involved, people — and situations — can sometimes get out of hand.

That’s where alcohol-awareness training programs come in. These programs educate servers about responsible alcohol consumption and offer strategies for protecting guests, employees and the servers themselves.

Alcohol service involves many risks. Failure to act responsibly could result in fines, imprisonment, losing your liquor license, increased insurance costs, or losing your business.

An alcohol certification program is designed to prevent intoxication, underage drinking, and drunk driving by enhancing the fundamental “people skills” of servers, employees, and consumers of alcohol. Alcohol awareness programs provide individuals with the knowledge and confidence they need to recognize potential alcohol-related problems and intervene to prevent alcohol-related tragedies.

WHO SHOULD BE CERTIFIED?

Anyone who serves alcohol in a licensed establishment should participate in a training course and receive their certification – Bartenders, Bar Backs, Servers, and Managers.

Alcohol certification is required by many bars and insurance companies.

Alcohol awareness training is often used by establishments to get lower insurance rates and as a sound defense in the face of any legal action taken against them. But it has also become increasingly important for servers to protect themselves. Due to dram-shop liability laws, servers themselves can be held responsible for any harm that intoxicated or underage guests perpetrate on themselves or others. So, it is important for bartenders to be aware of their liability and to protect themselves professionally and personally through this training.
Alcoholic Certification is now mandatory in many states. Every state has its own laws regarding the serving of alcohol, so you’ll need to check with your local liquor control board to find out what training is required. Listed below are the states that HIG writes liquor liability insurance and their laws regarding alcohol awareness training.

CT – Not state mandated

MA – Not state mandated but cities/counties may make mandatory

RI – Mandatory

PA – Mandatory

NC – Not state mandated

VT – Mandatory

NH – Mandatory for new licensees

You will find that many of the state restaurant associations offer alcohol awareness training programs.  These classes may be available online, in a classroom or on premises.

As a business owner, you need to be knowledgeable about the laws for alcohol awareness training along with understanding your liquor liability insurance policy.  Does your policy have an endorsement/exclusion that requires the servers to be certified or coverage will be denied?

As a niche writer of liquor liability insurance, we are here to assist you!  Contact Hospitality Insurance Group for your liquor liability insurance needs or find an agent here to request a quote for coverage.

by admin admin No Comments

Alcohol-Related Insurance Claims Against Our Restaurant Policyholders & How We Removed The Risk

Alcohol-Related Insurance Claims Against Our Restaurant Policyholders

In today’s world, businesses are sued daily and Insurance Defense Claimsheld liable for practically anything – especially alcohol-related insurance claims. One verdict in Boston topped $40 million, while two
bar lawsuit cases settlements in Worcester, MA each topped $20 million.

As a multi-state liquor liability insurance company, it’s our responsibility to protect our policyholders.

Take a look at some of the alcohol-related insurance claims and dram shop lawsuits against our restaurant policyholders that our team of Attorney’s have successfully defended.

CASE #1 Negligent Security General Liability A&B

PLAINTIFF: An underage patron was served at our policyholder’s establishment. He then randomly attacked other patrons with a hatchet concealed beneath his overcoat.

CLAIM: The claim filed against our policyholder alleged their failure to secure the premises.

VERDICT: After only one hour of deliberation, the jury concluded that the assailant’s actions were unforeseen and defense verdict was entered.

ESTIMATED EXPOSURE: High Six Figures

CASE #2 Dram Shop Liquor Liability

PLAINTIFF: A patron ordered several drinks at our policyholder’s establishment. Upon leaving, his vehicle collided with the rear of another motorist’s van.

CLAIM: The injured motorist filed a dram shop lawsuit against the policyholder after becoming a quadriplegic due to the impact of the accident.

 VERDICT: An arbitrator concluded that the evidence in this case, was inconclusive as to whether the patron was ever at the policyholder’s establishment on the date of the accident. The arbitrator sided with the defense.

ESTIMATED EXPOSURE: High Seven Figures

CASE #3 Dram Shop Liquor Liability A&B

PLAINTIFF: The plaintiff was struck in the face with a pool stick resulting in a fractured jaw that was wired shut for several months.

CLAIM: The lawsuit filed against the policyholder included counts involving negligent security and negligent service of alcohol to the patron who injured the plaintiff.

VERDICT: The jury concluded that the assailant’s actions were unforeseen and a defense verdict was entered.

 ESTIMATED EXPOSURE: High Six Figures

 

Click Here To Download A PDF Version


Hospitality Insurance Group is a liquor liability insurance group writing insurance for bars and taverns in Connecticut, Massachusetts, New Hampshire, North Carolina, Pennsylvania, Rhode Island and Vermont.

For more information about how you can work with Hospitality Insurance Group as an Independent Insurance Agent or obtain a quote for liquor liability insurance, click here to request a call from us, email or office visit from one of our local representatives near you.

by admin admin No Comments

How New Restaurant Trends Have Affected Liquor Liability Insurance

How New Restaurant Trends Have Affected Liquor Liability Insurance 

Drinking games at bars, BYOB, happy hour, and more. As we celebrate the 25th anniversary of our CEO John Tympanick, John looks back at the last 25 years in business and how new restaurant trends have affected liquor liability insurance.

25 employees, 6 states, over 440 Massachusetts agents, and 1000+ agents across Connecticut, New Hampshire, North Carolina, Pennsylvania, Rhode Island and Vermont. John Tympanick looks back at the last 25 years as Hospitality Insurance Group’s CEO and discusses the restaurant industry trends and changes he has seen over the years that have had an impact on insurance policies.

A lot has evolved over the last 25 years. Take a look at some of the trends we’ve seen in the industry over the years and how in fact it has affected insurance policies of businesses that serve alcohol.   

Ditching The Suit & Tie

More and more companies are looking to promote a laid back workplace and offer beer on Friday’s. What many employers and HR departments don’t understand is they need liability insurance for something like that. What happens when an employee has had too much to drink, and they get in the car, and the unnecessary happens?   

BYOB

Under Massachusetts law, restaurants with 30 seats or fewer, dine-in service, or who already have existing liquor liability insurance are unable to offer “BYOB” allowing a patron to bring in their own alcohol onto their premises.

However, Massachusetts restaurants without an existing liquor license, on the other hand, may or may not be allowed to obtain BYOB licenses depending on the municipality in which they are located.

While BYOB may seem like a great alternative to restaurants that can’t obtain liquor licenses, Tympanick advises that there is still a risk involved.

“A lot of people think by letting someone BYOB; there isn’t a liability. But what happens when someone comes in with their bottle, already intoxicated, and leaves your restaurant? We think there is definitely an exposure there for the restaurant.”

A waitress in Somerville also reacted to the BYOB concept in a blog by Thrillist stating: “I wouldn’t want to work at a BYOB because it makes policing intoxicated customers and preventing over-serving difficult, “but it does shift [some] responsibility away from the server and the restaurant.”

Alcohol In Supermarkets

Remember when alcohol became available in supermarkets like Stop & Shop back in 2006?  Current laws in Massachusetts only permit a maximum of 3 liquor licenses per corporation in the state. This is why you see alcohol available in some grocery stores but not others. We do think that in the next 25 years, Massachusetts will reconsider and make more licenses available to corporations as mentioned in an article here from 2011.

Cork It

Another trend we’ve seen in the last 25 years is charging a “cork fee” where the customer brings the liquor to the restaurant, and they charge you a bottle fee. Although this may help a restaurant save on costs and space for inventory, does having a cork fee increase the liability for a restaurant because they are now charging? We believe either way there is a liability, but ultimately it’s a judge’s decision.

Sunday Funday

Possibly because of the economy, the state has become more lenient on “Blue Laws.” Back in 2003, residents of Massachusetts were not allowed to purchase alcohol on Sundays. Then in 2014, Massachusetts altered its “Blue Laws’’ to allow for retail liquor stores to open as early as 10 am on Sundays.

Increase in Claims For Assault & Battery

As for the insurance industry, insurers have opted to tighten their belts with restaurants by placing sub limits on liquor liability assault and battery coverage. Out of the total number of insurance claims by restaurants, 35% are assault and battery related, a huge increase compared to 25 years ago.

For that reason, Hospitality Insurance Group does not sub-limit their insurance policies to their insured, whereas the majority of our competition charges extra for this coverage.

Restaurants Getting Creative

With more and more restaurants opening, we see that they are looking for a competitive advantage among the competition to stay engaged with their patrons. Creative new restaurant concepts where “flaming drinks” are offered may seem innovative,  what happens if that drink burns someone? Or offering games such as “beer pong” also known as “Beirut” at bars encouraging patrons to drink more.  As more restaurants move toward computerized systems and online technology, cyber security is becoming an area with some large uninsured exposures in some cases. While cyber security is not a current offering at Hospitality Insurance Group, we do see this being a possibility in the future.

But what about the next 25 years and where the hospitality industry is headed?

As allowed by some states, including Connecticut,  restaurants can stay open until 3 or 4 am. Do we think that will end up happening in Massachusetts? Probably not, because nothing good happens after midnight, let alone 3 am.

Despite consumer interest and other states like Illinois repealing their happy hour ban, we also don’t foresee Massachusetts lifting the current happy hour ban in place.

As for Hospitality Insurance Group, Tympanick says “We’ve seen a lot of our competitors in various states stop offering liquor liability coverage for one reason or another, so we’re here to stay.”

If you’re a restaurant looking for coverage, please contact one of our state representatives to find a local independent insurance agency near you. 

by By Sonya Gray By Sonya Gray No Comments

Defy the Odds, Own Your Risk

It is easy to have a ‘what are the chances’ mentality, but for bar and restaurant owners, that shouldn’t be an option. If you own a business that serves or sells liquor, you should take every precautionary measure to ensure responsible serving and consumption on your premises. Liquor liability claims are usually severe, often involving tragic fatalities or long term disabilities if the victims survive, so betting on the odds is not a risk you should be willing to take.

Every state has their own dram shop statues and the rules regarding burden of proof, common law, statute of limitations and damages awarded also vary. Every business owner should, at the very minimum, know the laws that affect their business, but there are other things you can do to minimize your risk.

  1. Create a safe serving culture: Management should implement policies and procedures that create a culture where safe serving is common practice. The following rules should go without question:
    1. Food should be readily available to patrons consuming alcohol
    2. Patrons should be allowed one drink per person at a time
    3. “Last Call “should be implemented and enforced prior to closing
    4. Happy hour, if legal in your state, should have set parameters
    5. Don’t allow employees to drink on the premises after their shift where employees are served by co-workers who might have a difficult time refusing a friend
    6. Management should have procedures in place for handling difficult situations. They need to recognize and read signs of intoxication before they escalate. Do you let patrons get intoxicated to the point that they need a designated driver or a cab to take them home?
  1. Educate your employees: Employers need to make sure alcohol awareness programs are available to all management and employees. Make it a requirement. Responsible Alcohol Management Program (RAMP) and the Serv Safe Alcohol Program are two national programs along with many others that offer alcohol training for your staff. These programs discuss Blood Alcohol Concentration and how to observe the different signs of Employees should be re-certified annually. Local Law enforcement can also help in educating you and your employees. Build a relationship with law enforcement; ask them to come in periodically to train employees how to recognize false identifications, methods of dealing with intoxicated guests and to discuss the local and state laws regarding the sale and service of alcohol.
  1. Monitor your customers & educate them about the dangers of drinking and driving. Some establishments offer free soft drinks to designated drivers. While it is impossible to tell the exact affect alcohol will have on one person versus another, the only way to sober up is to stop drinking and wait. The liver has to process the alcohol. While coffee and soft drinks won’t eliminate the alcohol in a person’s system, it just might stop that customer from having another alcoholic beverage they don’t need and give them the time they need to process the alcohol.

The environment you create does effect the amount of alcohol your customers will drink. Is your staff trained to monitor patrons as they enter, stay and exit? Does your staff communicate with each other when there is a change in shift? Is your establishment so crowded due to low drink prices that it is difficult to monitor? Are there reasonably priced non-alcoholic drink alternatives, food promotions and snacks available at all times? These are all questions you should ask yourself as the owner of an establishment that is at risk for a liquor liability lawsuit.

What else can you do?

Talk with other restaurant and bar owners to share ideas. Join your state’s restaurant or tavern association where you can discuss drinking trends, safety and procedures. How do you know if you are being effective? Check your surveillance videos and audit bar checks and receipts to make sure your message is being heard. If you do everything right and still have a reported incident, call your insurance company and report it right away. Due to the nature of the industry, even the most responsible of business owners will face claims, but the earlier you report it, the faster the insurance company can investigate and protect you. If you have followed the steps above, all the information they need will be readily available to them.

Be responsible and proactive in protecting your business because chances are, the odds will not be forever in your favor!

Sonya Gray is a Sr. Underwriting & Marketing Manager at Hospitality Insurance Group.

 

Please be advised that the opinions expressed are the views of the author alone and should not be attributed to any other individual or entity and shall not constitute a legal opinion.

by By Nicole Orchard By Nicole Orchard No Comments

Bar and Restaurant Insurance for Dummies Part I: Underwriting the Risk

As a new entrant to the industry, I have been faced with the challenge of learning the complex world of insurance. There is more to know about insurance than most people could learn in a lifetime, so for the purpose of this series I am going to focus on a specific class of business that I have learned about over the past year and a half: bar and restaurant insurance.

A challenging class

First and foremost I think it is important to point out that the bar and restaurant industries face challenges that make it a difficult class of business to underwrite.

Some of these challenges include:

  1. High failure rate – Some studies show that up to 90% of bars and restaurants fail within the first year in business. Many speculate about the accuracy of this number, but the fact of the matter is that opening a bar or restaurant is a high risk venture.
  2. Cash nature – The cash nature makes it difficult to determine the actual exposure. To rate these risks, the underwriter looks at both the dollar amount of food and liquor sales as well as the ratio of liquor to food sales. It is hard to determine the accuracy of these numbers when a lot of the sales are cash transactions and are not always recorded.
  3. Exposures created by off-premises activities – It is not uncommon for a bar or restaurant to run off-premises activities in connection with their establishment. These activities create additional exposures and are not always reported on the application.
  4. Parking and transportation/delivery – Parking and transportation/delivery present their own challenges. Many injuries occur in parking lots, and there are quite a few instances where an employee must leave the premises in the scope of their work, say to run an errand for the business. What if something were to happen while they were working but off the named premises? If a restaurant has delivery service, that is an entirely separate challenge in itself.
  5. Blurred line between liquor liability and general liability losses – It is not always easy to determine if a loss is covered under the general liability or liquor liability policy. For this reason, it is always a good idea to have both the general liability and liquor liability with the same carrier if possible.
  6. State dram shop laws – Dram shop is a term for laws that hold retail establishments and sometimes social hosts responsible for damages caused by serving alcohol to an obviously intoxicated patron. Each state varies as to whom is liable when an intoxicated patron, guest or minor causes injuries to oneself or to other.
  7. Cooking exposure and risk of fires – Any kitchen with a full cooking exposure is automatically at a higher risk of fire loss. There are risk prevention techniques that can be put in place to minimize the risk of fire, but it is hard to keep track of when and if these techniques are implemented.

Through the underwriter’s eyes

When an underwriter looks at a bar/restaurant submission, they consider the many different qualities that make the risk unique while also keeping the challenges noted above in mind.

There is a laundry list of items the underwriter takes into consideration when making a decision on a) whether or not they want to write the risk and b) how they are going to rate it per the exposure. The items they consider are called risk evaluation factors, some of which include:

  1. Class of business (restaurant, bar, night club, caterer) – Different classes of business have different exposures, plain and simple.
  2. Hours of operation – Establishments with longer hours are at a greater risk for loss, especially if they are open late or do not close at all.
  3. Clientele and location – Both the clientele and location can make a world of difference in determining the exposure of the risk.
  4. Entertainment – Any form of entertainment automatically increases the chance of loss. Establishments bring in entertainment to attract a larger crowd than they would have otherwise, which increases both the sales and exposure.
  5. Promotions – Much like entertainment, promotions are meant to bring in more patrons than normal. People tend to both eat and drink more during promotions because they are getting the same thing at a lower cost.
  6. Years in operation – As previously mentioned, the bar and restaurant industry has a high failure rate. The longer the establishment has been in operation, the more experience the owner(s) are likely to have.
  7. Owner’s experience in bar/restaurant business – The longer the owner(s) have been in the business, the better. Experienced owners are usually more responsible and know how to train their employees to minimize their risk.
  8. Security – employees or subcontractors? Security personnel are important to have, especially in a busy bar environment. However, there are some implications if the security personnel are subcontractors, not employees of the business.
  9. Alcohol server training – It is important that bar and restaurant employees are educated on how to responsibly serve alcohol and recognize those that are intoxicated. Many companies even offer a discount to those that utilize these programs.
  10. Adult entertainment – I don’t think I have to explain much here…

The underwriter takes each of these risk evaluation factors and does with them exactly what the term implies – they evaluate the exposure each factor presents and rate the risk accordingly.

There are many different exposures (types of loss) that bars and restaurants face, some of which are common to any business and some that are particular to this industry. In Part II of this series, I will discuss some of the specific coverages that are essential for bars and restaurants.

Be sure to look out for Bar and Restaurant Insurance for Dummies Part II: Important Coverages.

Nicole Orchard is a Marketing Representative at Hospitality Insurance Group. 

 

Please be advised that the opinions expressed are the views of the author alone and should not be attributed to any other individual or entity and shall not constitute a legal opinion.

Top