Dale J. Venturini
President/CEO, RI Hospitality Association
In August of 2017, RI Senate bill SB 373 was passed by the Rhode Island House of Representatives and the state Senate. The bill established a law which requires any individual who holds or is applying for a retail liquor license in the state of Rhode Island to provide physical proof which shows that they are insured for general liability, liquor liability, and property damage in the minimum amount of $300,000. Although those with retail liquor licenses are mandated by state law to have liquor liability insurance, many business owners remain uninsured and are oftentimes unaware of the law. This confusion is in part due to the fact that individual municipalities are enforcing the law in a variety of ways. Many towns are simply waiting until liquor licenses are up for renewal, pinpointing that date as the appropriate time to inform owners seeking renewal that liquor liability insurance must be purchased in order to secure a liquor license. In other cases, some Rhode Island towns and cities are proactively sending inspectors or written notices out to all liquor license holders within their jurisdiction to confirm ongoing compliance with the law.
Although most business owners pay for a general liability insurance policy, this does not effectively cover them for all potential liability claims. If you oversee the distribution, sale, manufacturing or service of alcoholic beverages, a general liability insurance policy will NOT cover you for any property damage or bodily injury for which you are found responsible. To put this in layman’s terms, if you do not invest in proper liquor liability insurance coverage, not only are you breaking the law, you could potentially be held responsible for the actions of customers who purchased/obtained alcohol from your business. Picture this: you own a restaurant, you do not have liquor liability insurance and one of your bartenders serves cocktails to someone who appears sober, but is already under the influence after visiting multiple establishments. Not long after, that person crashes into a building causing damage to the property and injuring themselves in the process. When that individual is apprehended by law enforcement and they conclude that the driver was under the influence at the time of the crash, who do you think is going to be held partially responsible for the driver’s actions? If you neglect investing in liquor liability insurance, this is the type of situation that would likely result in the closure of your business, or at the very least, the loss of your liquor license.
The bottom line is that if you serve alcoholic beverages, you need to have liquor liability insurance coverage, period. Aside from providing protection for your business, liquor liability insurance also covers you and your employees personally if you are named in a lawsuit. Although this type of insurance can be expensive, just imagine the money you would be spending if you ever found yourself facing a lawsuit without proper coverage. At the Rhode Island Hospitality Association, we offer our membership a variety of cost-saving programs including utilities and insurances. All RIHA members are eligible for 20% off of their liquor liability insurance through Hospitality Mutual Insurance, a Massachusetts-based insurance firm that specializes in the hospitality industry. Call your broker and ask them to get you a quote from Hospitality Mutual Insurance.
As an industry that prides itself on self-regulation and self-policing, I encourage you to revisit your current insurance policies to ensure that you have the right plans in place. Not only is liquor liability insurance mandatory in Rhode Island, it is critical to your operation. For more information please visit www.rihospitality.org.