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Don't Fear Fruitcake

By December 4, 2014August 22nd, 2018

I’m going to let you in on a little secret.  Don’t fear fruitcake this holiday season because there is something much scarier out there.  Instead, worry about the liquor liability that holiday celebrations bring to you and your business.

The holiday season usually means company-sponsored parties and that means a liability exposure for serving alcoholic beverages.  Is your current insurance program sufficient to address this concern? Is it necessary to purchase special insurance? Most states assign liability for serving minors or people who are visibly intoxicated.

The Commercial General Liability (CGL) policy provides coverage for liquor liability except for businesses ‘in the business of’ selling, serving, or manufacturing alcoholic beverages. If the event offers alcohol without a charge, it could be stated that the insured is not ‘in the business of’ selling or serving. If persons have to pay, even if the charge is only to offset the alcohol’s expense, that fact could create a different legal situation.

When hosting an event that includes liquor, some businesses have decided that hiring a bartender will reduce their risk of being held liable. This step at least offers the benefit of another party being held primarily responsible and reducing the amount the business might be required to pay. The main issue is obtaining proof from the bartender to confirm that he or she carries an adequate level of liquor liability insurance. Proof should be obtained prior to your event and shared with your insurance agent. Otherwise, it may be too late when you find out that there isn’t a policy or that the limits are insufficient.

Today, tolerance for drunk driving is low and an impaired driver who causes an auto accident is much more likely to be sued. Besides the driver, a lawsuit will likely include a business that provided alcohol to the driver. Why?  Because such a business is considered as contributing to the loss and is called on to share (or fully bear) the cost of injury or damage. In some cases, the Commercial General Liability policy might provide the necessary defense for the business.

The Flanders Group is here to help you understand your exposure to liability during the holidays and all during the year.  We’ll help you feel confident that you and your business are protected.  Call us at 800-462-6435 for more information.  So get out there and enjoy the holidays.  And don’t fear fruitcake – everyone can use another doorstop.