In most of the country, “dram shop” laws dictate that if restaurants and bars serve alcohol to patrons, they can be held liable for some liquor-related incidents. For example, if a bar serves a customer drinks and they leave the bar and cause a drunk-driving accident, the bar may be held partially liable in states with dram shop laws.
But in seven states (Maryland, Virginia, Delaware, Kansas, Nebraska, Nevada, and South Dakota), there are no dram shop laws: bars and restaurants assume no liability if a patron they serve alcohol to causes an incident. In light of a case of drinking-related manslaughter, Maryland’s highest court recently recommended that the state’s legislature reconsider whether or not bars and restaurants can be held liable.
Here’s a look at what happened in the case and what the ruling means for owners of bars and restaurants.
No Liquor Liability in Drunk Driving Manslaughter Case
In 2008, according to the Washington Post, Michael Eaton was drinking at Dogfish Head Alehouse. Here’s what happened next:
- The bar allegedly served him 17 beers and four liquor-based drinks.
- Eaton left the bar and proceeded to drive his car, at between 88 and 98 miles per hour
- He hit another car, containing a couple and their two granddaughters.
- The 10-year-old granddaughter was killed, and the other three passengers were injured.
- The grandparents sued Dogfish Head Alehouse for damages.
Even though many states require bars to stop serving patrons who are visibly intoxicated, Maryland doesn’t have dram shop laws. So, there was no legal ground for the court to hold the bar liable for the accident and death.
However, in its ruling, the court recommended Maryland reconsider a dram shop laws, which is hasn’t done in about 30 years. Since then attitudes toward drunk driving have changed significantly, and the court believes adding a dram law to reflect that might be needed.
Liquor Liability for Your Bar or Restaurant
So how might the Maryland case affect your restaurant or bar? If nothing else, it may bring dram shop law lobbying in states that don’t currently have them. And it serves as an excellent opportunity to refresh your memory about how liquor liability works in most of the country:
- Liquor Liability laws: In most of the nation, liquor liability laws mean that those affected by alcohol-related incidents can sue restaurants and bars for damages caused by their patrons. Translation: as a bar owner, you can legally take some of the heat for the crimes committed by or damage done by people you served, even after they leave your premises.
- Managing liquor liability risks: To minimize the risk that you’ll face a major lawsuit, settlement, or judgment related to liquor liability, it’s a good idea to train your servers in denying drinks to intoxicated patrons, invest in ID scanners to prevent underage patrons from getting in your bar, and have transportation alternatives available for patrons who are too drunk to drive. (For more Liquor Liability risk management tips, check out "Liquor Liability Lessons from the Hangover Trilogy.")
- The future of liquor liability: The legislative process moves slowly, so for the immediate future, you don’t need to worry about this court case changing your liability or obligations. If you haven’t updated your Liquor Liability Insurance in a while, however, now is as good a time as any to check in with your insurance agent and verify that your coverage is up to date.
Visit our restaurant insurance website to download our free eBook "Liquor Liability Insurance? I'll Drink to That: A Complete Guide to Serving and Hosting Responsibly".