WIN Magazine - Summer 2013 - (Page 38)
BY STEVEN A. ZAPPIA
Innovating to comply with “21 and Over”
The purpose of this paper is to provide an innovative solution to preventing underage drinking
and an overview of surplus lines pertaining to
liquor liabilities. This paper will address regulations and legislation for the distribution of alcohol
at establishments in the United States. It will also
include a discussion of policy implications for the
surplus and wholesale liquor and liability insurance market.
IQUOR LIABILITY INSURANCE is a line
of insurance in the category of surplus
lines markets, due to the extraordinary
exposures. In a bar and restaurant insurance policy things such as liquor liability,
general liability, property, crime, assault
and battery, umbrella, and employment practices liability
need to be covered. It is imperative to identify the exposures covered by bar and restaurant insurance policies
with specific emphasis on liquor liability, the underutilization of this type of insurance, and the availability and
applicability of various surplus policies.
Many young adults will be confronted with the harsh
realities of alcohol related accidents or fatalities and this
is a relevant topic that will generate interest in understanding the surplus market. It also demonstrates the
significance of risk mitigation and insurance coverage.
More businesses and individuals are concerned about
adhering to liquor liability legislation and concerned
about exposures from serving alcohol, specifically to
minors. There are many minors who circumvent the
legal drinking age by coercing peers to provide alcohol,
acquiring fake identification, and other inappropriate
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2013 White Paper Winner
Liquor liability insurance is the first type of coverage to be discussed. “Liquor liability insurance is a
business insurance that protects your business against
losses and damages claimed as a result of a patron
of your business becoming intoxicated and injuring
themselves or others” (Boop). These types of claims
usually take place when a patron of the bar or restaurant has overindulged in alcoholic beverages and
lacks the judgment not to get behind a wheel. It is often
times difficult for an employee of a bar or restaurant
to tell when an experienced drinker has had too much
to drink, yet the person who serves the alcohol and the
businesses employee can ultimately be held responsible.
“Attorneys typically seek a connection to those that
have the most to lose, so lawsuits often name liquor
manufacturers, distributors and others, along with the
business owner and server” (Tympanick). This can also
give rise to joint and several liability. Settlements for
these types of lawsuits can be very expensive therefore
establishments such as bars and restaurants that lack
coverage can be at great risk. Also, many states exclude
punitive damages awarded to the plaintiff from being
covered by an insurance policy.
The second type of coverage is general liability insurance which is intended to guard or protect owners
of a business from claims that can come from a wide
variety of sources. When running any business in
which you have employees or patrons you have a risk
of accidents occurring. This type of insurance protects
against bodily injury, property damage, or personal
injury claims made by someone else.
Third, is property insurance that covers a business against fires, theft, and natural disasters. Crime
insurance is also needed for bars and restaurants.
Common crime insurance claims are things such as
employee dishonesty, embezzlement, forgery, robbery,
Table of Contents for the Digital Edition of WIN Magazine - Summer 2013
Welcome Home: Employment Opportunities in Wholesale Insurance for our National Guard
Liability Insurance at the Inflection Point
A View from the AAMGA Chair of Risk Management & Insurance
Lloyd's: Engaging the New World of Risk
Coastal Property Insurance: The Carolinas
Liquor Liability Insurance: Innovating to Comply with "21 and Over"
Century Online and Beyond: Best Practices for Supporting the Ever-Changing MGA Model
In the WIN-ner's Circle
Index to Advertisers/Advertisers.com
WIN Magazine - Summer 2013
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