Dram shop reform comes to Alabama

On Behalf of | May 5, 2023 | Dram Shop

Businesses that serve liquor are under constant pressure to avoid overserving. Suppose one of their customers leaves the establishment under the influence and causes a serious or fatal accident. In that case, the owners of the enterprises pay a high price, costing them money and their reputations in the community.

A long and challenging history

The Alabama Dram Shop Act dates back to 1909, “dram” refers to bars, restaurants, and other businesses that serve alcohol. Its objective was to protect establishments in the business of serving alcohol. However, for liquor store owners, only three carriers were providing policies to liquor stores. In addition, companies are required to have coverage of $100,000.

When the “tab” comes due, many businesses in the liquor industry are out $35,000 on an annual basis. For years, calls for reform over an antiquated law were left unanswered.

Much-needed legislative action

In late March, in a unanimous vote, the Alabama Senate passed what they deem a “common sense” bill that brings much-needed reforms to liquor liability insurance. Legislators predict that insurance costs will lower. Language in the legislation establishes a more flexible standard with wait staff knowingly serving a customer who is clearly under the influence and the link in injury and death after they leave.

The Insurance Services Office (ISO) designates states to be assigned a grade for liquor liability dangers. Due to a 1991 case, Alabama’s received a rating of 10. Enacting the new bills would overturn that case.

The bill also has the support of the Alabama Beverage Licensees Association, Alabama Brewers Guild, Alabama Grocers Association, and other groups throughout the state.

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