What comes to mind when you hear the words “Holiday Party” or “New Year’s Celebration?” For most it means food, family, friends and fun. But what’s the best way to celebrate the end of a year and the start to a new one? With festive drinks of course.
It has become generally accepted that special events wouldn’t be as special without alcohol, especially around the holidays. Despite the omnipresent nature of alcohol this time of year, little thought is typically given to liquor liability or control of alcohol consumption.
If a drunk driver gets into an accident and injures or kills someone, it doesn’t matter whether the driver is coming from a bar, a restaurant or a holiday party. Someone is likely to be sued for millions of dollars.
Given the potential liability, anyone planning an event where alcohol will be served should be certain to take precautions. Event planning should include a process for preventing overindulgence. Even the most careful planning is not foolproof, so liquor liability insurance coverage is also a necessity.
Typically, whoever is pouring the alcohol can be held liable if intoxication results in an accident or injury. If a caterer is serving food and beverages, be certain the caterer is properly insured and has liquor liability coverage. If an event is being held at a business that frequently holds functions, the owner should have liquor liability coverage.
However, even if those who are serving alcohol have liquor liability coverage, never assume that you have the protection you need. Remember that when a suit is filed, the attorney typically will sue everyone who may be held responsible in any way. That may include a caterer and the owner of the facility that held the function, but it also may include the bartender and whoever organized the function.
If an event is being held in a home, homeowner’s insurance will usually provide liquor liability coverage, although liability coverage is typically limited to $100,000 to $300,000, depending on the policy. Homeowners should check with their agent. Cases involving homeowners as “social hosts” typically have been sympathetic to the homeowner, especially if individuals became intoxicated without the homeowner’s knowledge or when the homeowner did not supply the alcoholic beverages.
However, in the landmark case of McGuiggan v. New England Tel. & Tel. Co., which took place in 1986, the Massachusetts Supreme Judicial Court said that, given an appropriate case, it would “recognize a social host liability to a person injured by an intoxicated guest’s negligent operation of a motor vehicle” where the host should have known the guest was drunk, but permitted the guest to drive, resulting in an injury.
Preventing Liquor Liability
So what should you do to protect yourself when serving alcohol?
- Hire only experienced, trained bartenders. Bartenders are trained to recognize when individuals have had too much to drink.
- Have someone continuously monitor the premises. During a function, if no one is watching, adults may buy drinks for minors or minors may go from table to table, sipping adults’ drinks until they become intoxicated.
- Purchase one-day liquor liability coverage or add your name to an existing liquor liability policy. Coverage may be available for as little as a couple hundred dollars for a function, depending on the number of attendees and the coverage limits.
In Massachusetts, to obtain liquor liability insurance, the applicant must have a temporary license for serving alcohol. According to Massachusetts law, “A ‘Special License’ to pour liquor at an indoor or outdoor activity or enterprises may be issued to the responsible manager” of the activity or enterprise.
The license is issued by the local licensing authority of the city or town in which the activity is scheduled to take place. In smaller towns, a license may not be required. In such cases, the sponsor must write a letter stating that no license is required to hold the event and submit the letter when purchasing insurance.
According to the statute, the license may be issued “to a natural person,” who may be acting on behalf of a corporation, partnership or other entity. Temporary licenses can be granted to any entity for up to 30 days in any calendar year. This limit applies to all entities except college dining halls.
Laws regarding liquor licenses and liquor liability coverage vary by state, so it is important to be aware of the laws in your state before planning an event where alcohol is going to be served.
At any special event, perhaps the most important rule is to use common sense. Drink responsibly this holiday season. In doing so, you could save a life.
John W. Tympanick is President & CEO of 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.