If your Lodge hosts events where alcohol is served, you may face risks that other organizations don’t have to think about through dram shop laws. In some cases, you can be sued for the damages caused by an event attendee who’s had too much to drink.
To protect your Lodge, it’s important to know what liquor liability laws apply. However, compliance can be tricky because the law varies quite a bit from state to state. Read on for an overview of the state liquor liability laws, also known as dram shop laws.
What to Know About Liquor Liability and Dram Shop Laws
Alcohol-related injuries and deaths remain all too common, with more than 10,000 lives lost each year. States have enacted laws to combat the problem, allowing victims to sue the establishments that provided the alcohol. Usually this is a bar or restaurant, but your Lodge may also be targeted for a lawsuit if you over-serve an event attendee who goes on to cause a car accident or get in a fight.
These state laws are called dram shop laws, named after the teaspoon-sized “dram” servings of early American taverns and are on the books in most states. Dram shop laws allow an establishment to be held accountable for damages resulting from the illegal serving of alcohol, most commonly:
- Serving alcohol to a minor under the minimum legal drinking age of 21.
- Selling or serving more alcohol to a patron who is already visibly intoxicated.
While these are the most common kinds of laws, they are not universal. Since each state has its own law, it is useful to know what rules apply depending on your organization’s location.
Where Broad Dram Shop Laws Apply
Broad dram shop laws apply in 35 states, allowing liability lawsuits involving both minors who were illegally served alcohol as well as adult patrons who were illegally over-served. The states include:
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Dakota
- Rhode Island
- South Carolina
- Washington, D.C.
- West Virginia
However, a few of these states limit liability to more specific criteria:
- Florida limits liability for damage or injury by adult patrons to an establishment “who knowingly serves a person habitually addicted to the use of any or all alcoholic beverages,” rather than one who over-serves a “visibly intoxicated” patron.
- Mississippi limits liability to cases “when it is shown that the person making a purchase of an alcoholic beverage was at the time of such purchase visibly intoxicated.” While most states require evidence of over-serving for adults, Mississippi’s rule also requires it for minors.
- Missouri limits liability to establishments “licensed to sell intoxicating liquor by the drink for consumption on the premises,” which limits liability for alcohol sales consumed off premises.
Where Limited Dram Shop Laws Apply
Some states still have liquor liability laws on the books but limit liability more narrowly.
In four states, dram shop laws cover the illegal serving of minors but do not cover the serving of “visibly intoxicated” adults:
- North Carolina
California is another special case:
- California dram shop laws focus on the illegal serving of alcohol to minors, but liability is limited to cases where the minor was “visibly intoxicated.”
Three states have even more limited criteria for bringing a lawsuit against an establishment.
- Georgia limits liability to cases where the establishment “knowingly” served the alcohol to the minor or visibly intoxicated patron, “knowing that such person will soon be driving a motor vehicle.”
- Michigan limits liability against an establishment “unless the minor or the alleged intoxicated person” is also named as a defendant “and is retained in the action until the litigation is concluded by trial or settlement.”
- Texas limits liability by defining a “minor” as someone under the age of 18. For those served alcohol who were between 18 to 21, the rules for adults applies, including a requirement that the person was “obviously intoxicated to the extent that he presented a clear danger to himself and others.”
Finally, while many states have adopted dram shop law legislation, seven states don’t currently have laws on the books for dram shop liability:
- South Dakota
All the same, it may be possible for a third party to bring a liability lawsuit based on case law and court precedent even without specific dram law statutes. More information about state dram shop laws is available here.
How to Protect Your Lodge
Events where alcohol is served can be important to your Lodge, but it’s important to always be safe. Make sure your organization is compliant with your state’s dram shop laws and licensing requirements and ensure servers are properly trained.
Even with a good understanding of the law and proper training, it’s still possible your Lodge could one day face a liquor liability claim. You’re protected for Lodge Events with Liquor Liability coverage, administered by Lockton Affinity. It’s specifically designed to meet the needs of your Lodge, giving you peace of mind and the coverage you need.
When your Lodge rents their building for an event such family reunion or wedding reception, the renter must purchase a special event policy. This one-day policy includes general and liquor liability and will automatically name the Lodge as additional insured. This coverage is required for each individual event and can be purchased here.
Information provided by Lockton Affinity is not intended as legal advice.