Changing Laws, Changing Times
The drive to cut down on the number of drunk-driving incidents along with smoking in public places has taken its toll on the bar and tavern industryand the carriers who insure themto varying degrees.
David Price, executive vice president and chief underwriting officer for Burns & Wilcox, a wholesale broker and MGA based in Farmington Hills, Mich., said that many states hold bars liable under common law.
"Then there are those states like California and Louisiana that say if you were stupid enough to get drunk, well then woe betide you, and you must take responsibility for your own actions," Mr. Price said. "In those states, where we have those protections, the rate is much lower."
(According to the Insurance Information Institutes Web site, liability is permitted by statute in California and Louisiana, but with limitations and conditions.)
Mr. Price said the bigger barsusually sports bars that are parts of chainswill have what are known as TIPS programs (Training for Intervention Procedures) to train staff when to recognize when a patron will pass the "visibly drunk" test. "That is a very important part of underwriting the risk and it will make us feel more comfortable."
Considering the fact that today many bars are simply forgoing liquor liability coverage in states where that is permitted, it becomes clear that an adverse verdict in a third-party suit could have ruinous impact.
Michael Maher, vice president of marketing for the R.C.A. Insurance Group, a managing general agency in Clifton, N.J., said nonetheless that any claimant will have a tough time trying to recover from an allegedly negligent establishment. "You have to serve a visibly drunk patron in every venue and that gets into measurement and math," he said. "It is a difficult task."
So far the consensus seems to be that statewide anti-smoking bans in California and New York will have little impact on lowering premiums. "It is generally not the cigarette smoking that causes fires," Mr. Maher said. "Hoods are the biggest culprit in kitchen fires."
In addition to liquor liability and property coverages, lately a number of independent agents have been recommending employee practices liability insurance, which Mr. Price makes available, to meet the requirements of an age when an untoward remark toward a waitress may result in a lawsuit rather than a mere wink and a nod. (For related story, see page 24.)
Reproduced from National Underwriter Edition, January 6, 2005. Copyright 2005 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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