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Liquor Liability Risk Management Tips.

Posted 5/2/2018

Knowing your legal obligations along with implementing best business practices will help mitigate your operation’s alcohol-related risks and stem losses. Note: According to a report from the Center on Alcohol Marketing and Youth (CAMY) at Johns Hopkins Bloomberg School of Public Health and published by the American Journal of Preventative Medicine, 54.3% of binge drinkers who reported driving after their most recent binge-drinking episode drank in an on-premises, retail, alcohol-serving establishment such as a bar, club, or restaurant.


Become familiar with the laws, regulations, and standards of care in each state and local jurisdiction where your restaurant(s) is located, and follow them.


A strong policy should highlight the restaurant’s commitment to safe and responsible service, establish responsible business practices, describe service policies and procedures, identify the individuals responsible for implementing them, create a chain of command, and specify penalties for violations. Distribute the policy to all existing and new employees. Conduct a Q&A so that employees are clear about all your policies and procedures. Have them sign a document acknowledging that they understand the policies and will abide by them.


Use nationally recognized training and certification programs, such as TIPS® (Training for Intervention Procedures) and ServSafe® to conduct regular staff trainings to ensure that employees know how to identify intoxicated customers, avoid over-serving, understand the importance of responsible service, and remain current with the law. Staff should be trained on how to detect false or altered IDs and how to refrain from over-pouring.


Employees should be prohibited from drinking while working and from arriving to work under the influence of alcohol.


Put these practices into play:

  1. Require that anyone under the age of 30 produce proper proof of age (a government-issued photo identification with a physical description of the person on the document), and refuse service to anyone who cannot produce proof of age. Be sure the server logs the incident.
  2. Limit happy hours and prohibit contests that award prizes to staff who serve the most alcohol.
  3. Encourage the consumption of food and nonalcoholic beverages, and provide slower service for those who appear to be at risk of becoming intoxicated.
  4. Count drinks. This is a useful tool to understand whether or not a guest is becoming intoxicated. In order to count drinks correctly, you must know how much alcohol they contain. Here are the standard measurements for one drink: 5 oz. wine, 12 oz. beer, 1.5 oz. of 80-proof liquor and 1 oz. of 100-proof liquor. A rule of thumb is 2-2-1; no more than two drinks during the first hour, no more than 2 during the second hour, and 1 during the third hour.
  5. Keep an eye on a guest’s behavior. Watch for any physical and behavioral changes, such as relaxed inhibitions, impaired judgment, slowed reaction time, and impaired motor coordination.
  6. Refuse service to a visibly intoxicated patron or a known habitual drinker.
  7. Encourage designated drivers or have an employee call a taxi or ask the customer to call a ride-sharing service for anyone who appears intoxicated. Post signs advertising the establishment’s willingness to call taxis.
  8. Document and track all incidents. This is critical for two main reasons. By analyzing incidents, establishments can learn from the dangers of improper service and reduce the likelihood of repeated mistakes. Also, the ability to demonstrate that you have had minimal, if any, problems due to inappropriately serving customers can become invaluable to a successful defense in a lawsuit, if an incident does occur.
  9. Obtain and maintain proper insurance, including Liquor Liability and Excess Liability coverages.

None of these are à la carte practices. All should be part of an establishment’s risk management plan. These practices will help reduce risk and promote customer and public safety.

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