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How to Protect Your Brewery, Distillery or Bar from Injury Claims

Protect Brewery from Injury Claims

Legal disclaimer – this article is not offering legal advice. It is just laying the groundwork for you to start a conversation with your legal team and your insurance team.

As a business owner of a bar, distillery, brewery, or restaurant, you give your customers entertainment, enjoyment, great drinks and delicious food. However, along with all this fun comes an inherent risk of injury. Whether it is a customer or an employee, you could be held responsible for their injury related costs, if you are found liable. 

Consequently, it is important to understand how you can protect your business from injury claims. To start, You need to have a plan for both prevention and protection. Prevention measures that can stop injuries before they happen, and protection for when accidents do happen. In addition, you need to consider both your customers’ injury claims and your employees’ claims when developing your plans.

Common Causes for Bars, Clubs and Brewery Injuries

First, let’s look at injury claims associated with your customers. As mentioned, any business that serves or sells alcohol to customers starts off with additional risk added to the list of risks all business owners face. 

So, in addition to the common business risks: slip and fall accidents, unaccounted for safety measures, and out of bounds employee behavior or negligence, you also have to consider the hazards of running a bar. 

For example, when you run a bar or any place that serves alcoholic beverages, you may have hazards that include:

  • Intoxicated customers
  • Hard to see signs and dim lighting
  • Out of place security
  • Beverage spills or broken glasses
  • Possible fights

Hazards like these can lead to a customer accident, and if an injury occurs, then liability comes into play. 

Your Bar and Customer Liability Claims

According to “Premises Liability” as a bar, tasting room or restaurant owner, you might be legally responsible for an injury that occurs on your property. It will just depend on whether or not a court decides “negligence” was involved in the injury. (Source.)

According to Cornell Law School, negligence is “a failure to behave with the level of care that someone of ordinary prudence would have exercised under the same circumstances.”  So, your business could either do something to cause the accident, or not do something that led to an accident. (In legal terms, not doing something is considered an “omission.”)

Ways Your Bar Could be Negligent

There are many ways to be found “negligent” as a bar or restaurant owner. Without being a lawyer, I bet you could come up with a list on your own of ways a business could fall short of protecting their customers. 

For example, a bar could:

  • Not have warning signs up for a slippery bathroom or other area.
  • Not attend to spills or broken glass fast enough.
  • Not have reflective tape on hard to see steps.
  • Not have enough security in place for large crowds.
  • Have too many people in one area.
  • Have out-of-bounds employees that may not have been background checked.

If an accident occurs, and your injured customer decides to file a suit for damages or medical expenses, then the court will need to find negligence on your part to justify a payment or settlement.

Your Bar, Brewery or Restaurant and Employee and Worker Injuries 

In addition to the risks involved with serving your customers, you also need to consider the risks involved with the people who work for you. Workers also can file liability injury claims against your business through workers compensation laws.

According to the United States Bureau of Labor and Statistics (BLS), in 2019, workers in restaurants sustained about 93,800 nonfatal injuries or illnesses associated with doing their jobs. In addition, the BLS reported that about 33% of these cases required the worker to take off at least one day from their job because of their injury. 

How to Prevent Injuries and Protect Your Business From Injuries

Both small business owners and large corporations need plans in place to prevent and address injuries that result from running a bar or restaurant and from serving and selling alcohol. 

Next, let’s look at your business’ plan for both:

  1. Injury Prevention 
  2. Injury Liability Protection 

Please note, we will address both customer injuries and also injuries related to your workers.

Injury Prevention Plans for Bars and Businesses that Serve Alcohol to Customers

According to the Insurance Information Institute (III), in order to prevent injuries and reduce your risk of liability, you must “behave lawfully and with demonstrable responsibility for the welfare of third parties—a group that includes your clients or customers, competitors and the general public.” 

To begin your customer protection plan:

  1. First, consult with your professionals. Your legal team and insurance team can be a big part of your prevention planning. We highly suggest you start or end with a professional consultation from both your lawyer and your insurance agent.
  2. Then, do an audit of all your businesses potential hazards and risks to see where you can prevent injuries from happening.
  3. Finally, make sure you have a system in place to ensure the continued safety of your patrons, and then, effectively and continuously communicate that system to your staff. 

Injury Prevention Plans for Your Workers / Employees

In addition to behaving lawfully, and taking responsibility for your customers’ safety, you are also required to do the same for your workers and employees. Make sure that you are in compliance with any state workers comp programs and any laws associated with your industry and location. 

Having a well trained and communicative staff will help in keeping your workers safe and able to do their jobs well. We suggest reaching out to your industry’s trade groups or to a workers’ safety consultant to help you best protect your workers from injury.

Injury Protection Plans for Customers and for Your Workers / Employees

Injury claim protection starts with having the most appropriate insurance in place for both your customers and your workers. This means having:

  1. Business Liability Insurance
  2. Workers Compensation Insurance

Business Liability Insurance for Injury Claims Protection

To start, all businesses need standard, general business liability insurance as their first line of defense. In addition, bars, breweries, distilleries, clubs and restaurants that serve alcohol need to consider “liquor liability insurance.”  Let’s start with some definitions:

  • General Liability Insurance protects your bar or business from lawsuits and claims from general injuries or property damage. (It can also cover slander suits.) Note, liability insurance is different from commercial property insurance (which covers your own assets and equipment).  (Source.)
  • Liquor Liability Insurance is a policy that covers the costs of legal fees, settlements, medical payments, court rulings and damages resulting from actions of your customers to whom you served or sold alcoholic beverages. 

General Liability Insurance 

Before you do anything else, you need to make sure your business has effective and comprehensive liability protection. Your General Liability Insurance Policy is your best form of protection against customer injury claims, payments and settlements. Your independent insurance agent will be able to help you find a liability policy that fits your specific coverage needs to protect you from the inevitable slips, trips, and other injuries that your customers incur on your property. 

Liquor Liability Insurance

Next, every state has different laws in place in regards to damages and injuries that result from intoxication. These laws are often called “Dram Shop Laws” and they protect the general public and other businesses from the actions of your intoxicated patrons. As a result, you most likely will need an additional liability policy that covers the harm, injuries and/or damages caused by your intoxicated customers. 

For example, a liquor liability policy would protect your business from claims and court rulings resulting from an auto accident related to a customer you served alcohol. Your general business liability policy would most likely not cover this type of claim.  

Again, please consult your local independent insurance agent that understands your state’s laws to help you find the best liquor liability coverage for your bar.

Workers Compensation Insurance for Injury Claims Protection

In addition to both general and liquor liability insurance policies, your business will also need protection from injury and illness claims from your workers.

  • Workers Compensation Insurance is your protection from costs associated with your workers being injured (or becoming ill) while working for you. According to Investopedia, “It is effectively a disability insurance program for workers, providing cash benefits, healthcare benefits, or both to workers who suffer injury or illness as a direct result of their jobs.”

The US government created the Workers Comp Program and it mandates that every state have a program for workers’ protection. However, it is up to every state individually on how workers comp benefits and programs work. So again, we recommend you talk with your insurance agent to understand what you need to be compliant in addition to what coverage you need to protect your business.

Conclusions and Action Steps

In summary, your bar or other alcohol serving business will need protections set in place to mitigate the risks associated with injury and illness claims. 

  1. You will need to consider basic business liability insurance, liquor liability insurance, and workers compensation insurance. These three insurance programs will help to protect your assets from being drained by injury lawsuits.
  2. Additionally, you will need to set in place plans and systems that help you to prevent injuries from happening in the first place.
  3. Finally, a great place to begin planning and protecting is with a call to your legal team and to your independent insurance agent. Your legal team can give you the advice you need on preventing claims and your insurance agent will advise you on the best insurance products available to you to protect your business. 

Please reach out to our agency with any liability insurance and workers comp insurance questions that you have. Our team is ready now to help you create or audit your injury claim protection plan, so you can focus on growing your business and enjoying your workers and customers.

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