The Legalities of Hosting a Drink Event
Lawyers and event planners share tips for reducing the risk of alcohol-related accidents and limiting liability
November 29, 2018
It’s an event producer’s nightmare: A guest leaves the event intoxicated, has an accident, and injures someone. Even though the guest left the premises, under the particular state’s dram shop law, the event host, the producer, and the venue could be held liable for the guest’s actions. If such an incident occurs and the event host, planner, or venue lacks sufficient liability insurance, a costly lawsuit could potentially put one-or more-of them out of business.
Understanding local laws, having adequate insurance protection, and taking steps to minimize risk are key considerations when planning and producing events, especially those at which alcoholic beverages will be served. The safety and well-being of the guests must always be a top priority-and so should protecting one’s business. SevenFifty Daily spoke with event professionals and legal experts on the beverage alcohol industry to find out how events companies can best protect themselves against the risk of an alcohol-related accident.
Hire a legal expert.
Event organizers should plan to engage legal counsel to help them interpret the laws in their state. “It’s best to hire a lawyer with expertise in that state or a national firm that does business in all states,” says Louis J. Terminello, the chair of Greenspoon Marder’s national Hospitality, Alcohol, and Leisure Industry Group in Miami.
Dram shop law determines civil liability for establishments that serve alcohol-and liability under this law varies by state. Terminello explains that Florida, for example, is considered a “limited dram shop” state. “This means a person who sells or provides alcohol to a person of lawful drinking age is not liable for damages,” he says. “They are liable, however, if they knowingly-and unlawfully-serve or sell alcohol to a minor, or knowingly serve someone who is habitually addicted to alcohol. Under the law, someone in the family can notify an establishment that the customer is habitually addicted to alcohol. Any further service to that person can result in dram shop liability. This applies to all service of alcohol for any venue or event.”
To find a legal expert, event professionals can ask colleagues for referrals or go through the National Association of Alcoholic Beverage Licensing Attorneys.
Review your insurance coverage before signing contracts.
Many venues and event hosts or sponsors require event planners and caterers to provide a COI (certificate of insurance) and request riders (optional terms and conditions) naming the host, venue, or sponsor as additionally insured for damages (for example, $1-$2 million in liability coverage). Richard Keating, a partner at Swanson, Martin & Bell in Chicago, advises event producers to meet with their insurance broker and lawyer to review coverage and identify gaps before signing a contract. “It’s important to make sure a policy covers dram shop liability,” he says. “If it does not, you should consider taking out a separate dram shop policy, since the existing policy may not cover a special or temporary event. Furthermore, for coverage to be valid, the additional insured party must be named in both the policy and on the declaration, [or] summary, page.”
Keating emphasizes the need for two types of accountability: dram shop liability and general liability. Under dram shop law, a victim injured by an intoxicated person can pursue legal action against the establishment or the provider that served the intoxicated customer. Says Keating, “If an intoxicated guest leaves your event and has a fistfight with someone, the venue may still be liable under dram shop law even if the incident did not take place on-premise.” General liability covers injury or harm to the individual attendee or customer. “If an intoxicated person is escorted from an event and sexually assaults someone or wanders into traffic and is hit by a car,” says Keating, “both the venue and server can be sued under dram shop law. If the intoxicated person injures himself, he cannot sue under dram shop but can sue under general liability.”
Keating also notes that the statute of limitations is usually one year on dram shop law and two years on general liability-and it applies to the last place the individual was served alcohol. “This means,” Keating says, “an incident could occur and you could go 11 months and 28 days unaware that it happened and still be sued.”
Set up procedures to minimize overconsumption.
Taking steps to protect guests from becoming intoxicated can help mitigate potential problems when the guests leave your event. This includes working with your venue or caterer to supply a substantial menu of food offerings, providing nonalcoholic beverage options, and setting up water stations or offering bottled water. “Another tactic is to limit pours and stop alcohol service 30 minutes before the event concludes,” says Seattle-based event producer Jamie Peha of Peha Promotions. “Depending on the event,” she adds, “offering attendees [a limited number of] tokens or tickets [to] exchange for alcohol can help to control the level of [alcohol] intake.”
Train servers in alcohol safety awareness.
Serving alcohol responsibly is critical both for guests’ safety and for protecting one’s business. A common resource for alcohol training is TIPS, an online alcohol safety certification program that seeks to prevent intoxication and underage drinking. It’s available to liquor license holders, as well as servers working on-premise or at banquets or other special events.
In some states, hiring TIPS-certified staff or other professionally trained staff can provide some legal protection. Terminello points to Florida’s Responsible Vendors Act, a state statute he helped draft in 1990, as an example. “[It] is a voluntary program for restaurants, bars, caterers, and other licensees that teaches proper handling of alcohol,” he says. “The program offers participating vendors some immunity from disciplinary action taken by the State of Florida in the case of a liability issue.”
Establish security measures.
There are a number of security tactics that can help event professionals reduce the risk of an alcohol-related incident. They can use color-coded wristbands to identify underage attendees, hire licensed security guards to watch for inebriated guests, provide a quiet first aid area-or an EMT-for larger events, and authorize parking attendants to call a taxi for any guest who appears intoxicated rather than letting that person drive home.
Lara Vann-Dagenhardt, the owner of Whitegate Events in Boulder, Colorado, says that her company hires TIPS-certified staff to work as bartenders and to check guests’ IDs at the door. “Early action on your part may prevent [a] guest from becoming a problem,” she says. “Your decision not to serve an intoxicated customer not only could save your liquor license but could also save someone’s life.”
Offer guests transportation options.
Free shuttles and discount ride-share codes should be included in every event plan to reduce the risk of alcohol related accidents. When the Kentucky Distillers Association initiated a statewide collaboration with Lyft to offer special discount codes for distillery events and popular drinking holidays throughout the year, alcohol-related road incidents were reduced. Ali Edelstein, the association’s director of social responsibility, says, “Kentucky’s average for alcohol-related fatal [accidents] is now 21 percent-[that’s] below the national average of 28 percent. In Louisville, DUIs have been reduced by 50 percent since 2013, the last full year before ride-sharing in Louisville began.”
The best-produced function is also a well-protected one. It’s in everyone’s best interests that all guests have a safe experience. While guests may be responsible for how much they imbibe, and hosts are responsible for how much they serve, lines can blur quickly when the matter becomes a legal one. Implementing alcohol safety practices, establishing security measures, seeking expert legal advice, and having adequate liability coverage are all smart investments for event professionals dedicated to hosting safe, successful events.
Melanie Young is cohost of The Connected Table Live (iHeart.com), a weekly national radio show featuring conversations with leaders in wine, food, spirits, and hospitality around the world. A freelance writer and author based in New York, she has contributed articles on wine, spirits, food, and wellness to Santé Magazine, Beverage Enthusiast, Gourmet Business, Wine4Food, and publications covering healthy living. She formerly ran an eponymous culinary-events agency and served as director of the James Beard Foundation Awards, which she helped create.