Restaurants, Bars, & Breweries: Pandemic Related Risks and Insurance Protection
Liquor liability coverage: online ordering, curbside delivery and sidewalk dining and drinking will continue to expose owners to liquor, auto, cyber related liabilities.
As vaccination picks up speed, more and more people are able to physically frequent bars, brewpubs, tab-rooms, and local niche breweries, will consumers’ new habits developed during COVID for curbside pickup or deliveries continue?
Most likely, curbside pick up and delivery, as well as outdoor seating on sidewalks and in the parking lots will continue, at least for the rest of 2021 and perhaps even longer. This calls for a new look at liquor liabilities, since new risks will expose restaurants, bars, and tab-rooms to potential liabilities.
Most state laws hold bars and restaurants responsible for alcohol related liabilities
The “Dram shop laws” differ from state to state for serving alcoholic beverages to intoxicated or underaged. In as many as 35 states, the bars, brewpubs or restaurants are held liable for intoxicated actions by their patrons or customers of alcoholic beverages, on the premises where alcohol is served to these customers, or through a curbside pickup.
Some states have no upper limit on liquor liability coverage, while other states cap at $1 million.
Checking ID for age verification, watching out customers for signs of intoxication, and serving alcohol within legal business hours… all these precautionary measures are important for the owners of restaurants, bars and pubs.
If you need an expert to review your policies for sufficient liabilities coverage, please contact the Extra Milers on our team. Our contact information is provided below.
The Risk in assigning employees to drive their own vehicles to deliver food and beverage
Even if the business liability coverage has non-owned auto coverage, it does not cover employees who rely on their own personal auto insurance in case they get into accidents during delivery. Most personal auto insurance has a business use exclusion, leaving an employee vulnerable for all damages to vehicles, cost of lost product, medical and litigation costs.
In this case, having an umbrella coverage for the restaurant and bar owners can help alleviate the liability exposure.
The owners can take measures to mitigate their exposures to delivery-related risks by creating policies against distracted driving and driving under the influence, checking employees’ driving records for DUIs and speeding, or by only using 3rd party delivery services such as DoorDash.
Cyber security risks and liabilities
The pandemic created work-from-home opportunities and most likely it will continue to various extent even after the pandemic is under control. As customers order online for deliveries or pickups, payment transactions are taking place remotely.
Business payroll, accounting and employee social security numbers are often handled through pirate devices or unsecured WIFI.
All these have exposed owners to potential cyber security incidents and data breaches that can cost dearly, both hurting the revenue and the reputation. Having cyber liability insurance is a very affordable way of protecting against costly claims.
(The above is partially based on a summarized version of the following: “Risk on tap for craft brewers in a pandemic world”, by P. Martinez, Insurance Journal, March 22, 2021. )
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