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Search Results for: social host liability law

Liquor Liability 101: How to Serve Alcohol at Your Nonprofit Events

December 21, 2017

Brian Johnson
Nonprofits Insurance Alliance

When most Americans think of this time of year, they imagine hot cocoa, candy canes, and reindeer. However, when most nonprofit leaders think of this time of year, their minds go to holiday events and fundraisers, the spirit of giving, and, more likely than not, how to safely provide alcohol at said events. Whether your nonprofit is serving alcohol to employees and guests, or selling it in order to raise money, here are some questions to consider so that your nonprofit doesn’t find itself faced with an alcohol-related lawsuit.

Are You Familiar with Your State’s Social Host Liability and Dram Shop Laws?

Social host liquor liability laws cover situations where liquor is provided at no cost. Most states have these laws, which hold your organization responsible for providing liquor to minors in any situation that results in injuries to the minor, or injuries that the minor causes to others due to alcohol intoxication. Some states have stricter social host liability laws which go beyond underage drinking. These laws can hold you responsible for accidents caused by anyone allowed to drink to excess then injures themselves or a third party.

Dram shop laws determine how the liability flows from injuries caused by intoxicated people or minors when alcohol is being sold to customers. If a nonprofit has a fundraiser and sells liquor to attendees, in some states they could be held responsible if an attendee has an alcohol-related accident and injures themselves or others. In fact, depending on the state, an establishment selling alcohol could be held 100% liable for alcohol-related accidents if it’s proven a person got intoxicated, or further intoxicated, at their establishment.

Understanding these laws will help your nonprofit put the proper controls in place to better protect against an alcohol-related accident. This is especially true in states that allow nonprofits to easily obtain an event specific liquor license, such as Colorado. While these days liquor licenses make it easy for a nonprofit to organize a fundraiser where they sell alcohol, that doesn’t mean that liability doesn’t exist.

Do You Have Controls in Place for Service?

The key to any event involving liquor sales or host liquor is making sure you control who can attain an alcoholic beverage, and how much they are able to access. There should be controls in place to ensure that minors are not served alcohol. This can be done in many different ways including:

  • requiring a picture ID anytime someone asks for a drink
  • giving out bracelets or wristbands to potential alcohol drinkers after showing ID, and having the bartender check for the bracelets
  • giving out drink tickets to adults (with proper ID)

In addition to making sure people are old enough to drink, you should also have controls in place to make sure visibly drunk people are cut off from being served additional alcohol.  Depending on the state, there are laws which stipulate when a bartender should stop serving someone who is considered to be intoxicated. In certain insurance claims, it’s the bar’s adherence or neglect of these rules which make them more or less liable in cases of an alcohol related death.

The best way to control the flow of alcohol is to make sure your servers understand the laws and serving guidelines, and to limit consumption when appropriate.

Who is Going to Serve the Alcohol?

In most states, there are companies that specialize in bartending for events. These companies have trained and certified their bartenders to know specific state laws and serving guidelines, and as such, many nonprofits choose to hire one of these companies for their events. In addition to bringing in trained bartenders, these companies also carry liability insurance, which should cover any negligence on the part of the bartender, such as serving a minor or a visibly intoxicated patron.

Some nonprofits will elect to serve the alcohol themselves, especially in host liquor situations where the alcohol is being provided at no cost. If this is the case, having controls in place and an understanding of state liquor laws is essential.  Any designated servers should be trained to proficiency on the signs of alcohol impairment, and have protocol for handling visibly intoxicated individuals.

Do you Have the Correct Insurance?

A standard general liability policy provides host liquor liability, which covers events where alcohol is provided free to guests, but not situations where alcohol is sold. Examples of what is covered include an open bar at a Christmas party, a wine tasting event for staff or donors, or providing beer at a picnic. For many nonprofits, this is adequate liquor coverage.

However, in some cases, nonprofits sell liquor at fundraising events. For example, a nonprofit may hold an event at a local bar, who donates their space and allows the nonprofit to keep 50% of the bar sales. In this example, the nonprofit could be held liable under dram shop laws, which may be more severe than host liquor laws. The nonprofit should request a full liquor policy to cover these events as they may not be covered under the host liquor liability included on their policy.

Although there are potential risks involved with serving alcohol to employees and guests at holiday parties and fundraising events, learning about state laws, putting proper controls in place, and having a comprehensive insurance policy can help limit those risks so that your nonprofit can stay calm and party-on this holiday season.

If your nonprofit is not a member of the Nonprofits Insurance Alliance and you’d like to learn more about joining our community, check out our list of coverages and other benefits of membership. You can also send an email to info@insurancefornonprofits.org.

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View Topic: Insurance Issues for Nonprofits Tagged With: 501(c)(3) nonprofit, 501c3, Accident, Alcohol, Dram Shop, Dram Shop Laws, Events, Fundraiser, Fundraisers, Holiday, Holiday Fundraiser, Holidays, insurance, Insurance Carrier, Insurance Company, Insurance Coverage, Insurance Explained, Insurance for Nonprofits, Intoxication, Liquor, Liquor Liability, loss control, Nonprofit, Nonprofit Leader, Nonprofit Professional, Nonprofit Sector, Nonprofits, Nonprofits Insurance Alliance Group, Risk Management, Serving Alcohol, Social Host, Social Host Liability

Serving Alcohol at Celebratory Events? Guidelines to Follow

February 6, 2019

Brian Johnson
Nonprofits Insurance Alliance

While many of us love adorning workspaces with heavenly flowers and heart-shaped cards that mark Valentine’s Day, executive directors and HR departments often worry about how they can safely serve alcohol at special events on this or any special occasion. Irresponsible hosting can result in claims and lawsuits, especially in alcohol-related accidents. Whether the happy celebration is to revel or to raise funds, here are some factors to consider when determining how to reduce risks at these spirited gatherings.

Consider venues with a liquor license

The first place nonprofit organizers might think to host a social event is on site at their main location. However, a restaurant or a bar may be a wiser choice compared to the office or a private home.. Hosting the party or social mixer at a business with a liquor license instead will help minimize liability risks. If the venue selected doesn’t serve alcohol, make sure that serving alcohol on the premises is permitted and check the precautionary requirements.

Nonprofits who opt not to make reservations at an establishment that serves liquor should consider leaving the serving to professionals. It’s a good idea to hire a professional bartender. Most bartenders know better when to limit alcohol consumption and are trained to identify signs of intoxication. Companies that provide bartenders should carry liability insurance to cover bartender negligence in the event that a minor or intoxicated adult is served. Nonprofits should ask if companies providing bartenders carry the proper insurance and require, in the contract with them, that they add the nonprofit as an additional insured on their policy. Finding a company that specializes in bartending for events is a great way to ensure that certified bartenders who are familiar with state laws and trained with serving guidelines are handling drinks. Wherever you decide to celebrate, place prominent signs at the venue stating rules of conduct.

Check your insurance coverage

While standard general liability insurance may cover events serving free alcohol under host liquor liability, the liability coverage may not apply to events where nonprofits sell alcohol, such as fundraisers. In addition, selling liquor at an event might render the nonprofit liable under dram shop laws, which in some states may be stricter than host liability laws. For events where alcohol is going to be sold, nonprofits should be protected with liquor liability coverage.

If you are insured with the Nonprofits Insurance Alliance, no worries, we’ve got you covered!  Unlike many of our for-profit competitors, our General Liability policy automatically includes Liquor Liability Coverage at no additional charge to you.  This means that in addition to having coverage for host liquor liability, you have liability coverage for events where liquor is sold.

It’s also a good idea for nonprofits to check whether their insurers offer resources that may help prevent claims, including claims arising out of fundraisers and the furnishing of alcohol. Nonprofits Insurance Alliance offers detailed and interactive webinars where members can ask questions on these and other issues pertinent to the nonprofit community.

Consult your state’s host liability and dram shop laws

While it’s tempting to include guests of all ages at friends- and family-oriented parties, the safest way to make sure underage guests aren’t served alcohol is to consider limiting the event to guests over the drinking age. Nonprofit organizers should make no exceptions when checking ID. If there are volunteers at the event, they should be of or over drinking age and encouraged to limit their own alcohol intake.

To regulate events that provide liquor at no cost, most states have social host liquor liability laws. These laws vary widely from state to state, but typically the organization hosting the event is held responsible if minors are injured or cause injury to others as a result of illegal alcohol consumption. In most states, strict social host liability laws extend beyond underage drinking and can hold organizers responsible for injuries caused by intoxication, whether the intoxicated individual inflicts harm on themselves or on others.

If liquor is provided at a cost, dram shop laws apply in most states to determine who is liable when intoxicated adults or minors cause injuries. In some states, the organization hosting can be held responsible if the alcohol sold to customers results in an alcohol-related accident that harms attendees. If it’s proven a person became intoxicated at an establishment, the establishment can be held 100% liable in some states. Nonprofits using a third party vendor should ask that the contract include indemnification, a provision that transfers risk to the vendor.

Nonprofits in states that allow easy obtainment of liquor licenses should note that liability still exists in those states. Be sure to refer to these laws and understand them to better control the situation.

Controls can prevent accidents

Nonprofits should encourage their guests to select a designated driver who will refrain from drinking. Savvy nonprofits might make arrangements with a rideshare company to provide rides to intoxicated guests.

To counter the effects of alcohol, it’s a good idea to offer non-alcoholic beverages and to serve food. Make sure guests have access to plenty of water. Don’t rush too quickly to refill empty cocktail or and wine glasses or engage in activity that could create an atmosphere of pressure to drink. Never serve alcohol to guests who are intoxicated. Toward the end of the evening, stop serving liquor entirely. Switching to soft drinks, tea, coffee, or non-alcoholic cocktails after a certain hour helps diminish the effects of alcohol.

With the right controls in place, nonprofits can minimize risks and guests can enjoy an accident-free experience!

If your nonprofit is not a member of the Nonprofits Insurance Alliance and you’d like to learn more about joining our community, check out our list of coverages and other benefits of membership. You can also send an email to info@insurancefornonprofits.org.

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View Topic: Claims, General Liability

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