Insights and tips on how to protect your inn or bed & breakfast, giving you and your guests peace of mind.

Ward, Hayden
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Don’t Let Your Inn Be on the Rocks

wedding at bed and breakfast

Hosting events at your Inn is always a good time. People are smiling, dancing and open bars might be flowing. Anytime alcohol is served, you expect your employees or patrons to have a good time and act in a responsible manner.

While most businesses serve alcohol without incident, the harsh reality is that lawsuits related to liquor liability are filed each day. All it takes is a single liquor liability claim to put your entire business at risk.

To help your Inn navigate the risks associated with serving alcohol, we’ve put together a few steps you can take to mitigate the risk of facing a costly lawsuit or insurance claim.

What is Liquor Liability?

Liquor liability refers to an organization’s legal and financial responsibility for the actions of a person who consumes alcohol at its establishment and the consequences of those actions. Under liquor liability laws, businesses can be held liable for bodily injuries and property damage caused by a person who was served alcohol at their establishment.

Your business may have a liquor liability exposure if you do any of the following:

  • Sell or distribute alcohol at your place of business
  • Allow patrons or guests to bring their own alcohol and consume it at your place of business
  • Serve alcohol at an event you are hosting
  • Allow others to serve alcohol at your venue

Liquor liability covers you if you’re giving alcohol away for free, charging for alcohol during an event or selling alcohol in a restaurant you own. Make sure you’re aware of liquor license requirements in your jurisdiction. Please note that host liquor coverage covers an occasional “party” situation hosted by the business. It does not cover you if you are in the business of “manufacturing, distributing, selling, serving, furnishing, or giving away alcoholic beverages.”

Assess Your Risks

When implementing a risk management program for liquor liability, it’s important to understand the nature of your business. Having a sense of how frequently your Inn serves alcohol, and in what manner, can help guide your business in the right direction.

Provide Training to Staff

It’s crucial to provide ongoing training for any employees who serve alcohol. At a minimum, your employee training should address the following:

  • State and local liquor laws and requirements
  • How to verify age and recognize false identification
  • Indicators for when someone may be purchasing alcohol for minors
  • How to refuse service and manage difficult situations
  • The process for documenting incidents
  • A consistent method of measuring and serving alcoholic drinks
  • When and who to turn to for assistance
  • The consequences of not following policy
  • The signs of intoxication or alcohol impairment

Teach your staff how to recognize when patrons have had too much to drink. The SMART (Server & Managers Alcohol Responsibility Training) program suggests using the traffic light system, rather than counting how many drinks a guest has had, is more effective in monitoring how much a guest is drinking. Here’s how it works:

  • Green: The patron shows no sign of impairment, is in a good mood and is not drinking rapidly.
  • Yellow: The patron is not yet intoxicated, may be drinking quickly, may be either in a “down” mood or out to celebrate, and may be showing some signs of impairment. Your goal is to stop serving before a guest is intoxicated, so serve this guest with caution.
  • Red: The patron shows signs of intoxication, may be in a depressed or aggressive mood, is drinking fast, and seems intent on becoming drunk. This guest should not be served alcohol.


Liability Insurance

In addition to liquor liability planning and education, review your company’s current insurance policy to determine your coverage in social-host situations. Even with the correct coverage, a liquor liability policy does not eliminate your exposure if alcohol service is in violation of a statute, a minor is served, or an already intoxicated person is served. It’s also important to have a program in place that includes the following recommendations when working with third-party vendors:

  • When working with a vendor, such as a caterer or a bartender service, verify they are licensed and insured.
  • Stipulate in your vendor’s contract that only those who have received alcohol-awareness training should serve or sell alcohol at your event.
  • Require the vendor to provide a Certificate of Liability Insurance to include Liquor Liability coverage naming your company as Additional Insured.


Don’t Take a Shot without the Correct Coverage

We’re ready to help you design a plan to limit your business’s liquor liability and raise your spirits. To learn more about protecting your business through CBIZ Innkeepers Insurance, connect with a member of our team.

This blog may contain scenarios that are provided as examples only. Coverage is subject to the terms, conditions and exclusions of the policy issued. The information provided is general in nature and may be affected by changes in law or the interpretation of such laws. The reader is advised to contact a professional prior to taking any action based upon this information.

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CBIZ Innkeepers Insurance, a division of CBIZ Insurance Services, Inc., is the largest insurer of innkeeper businesses in the United States. As part of an $850 million New York Stock Exchange traded company (CBZ), we developed a specific policy coverage to meet the needs for inns and bed & breakfasts, and the amenities offered by these businesses. Our policy is underwritten by an A.M. Best Rated A++ (Superior) company.

The CBIZ Innkeepers Insurance team knows insurance, specifically the risks and exposures related to beds & breakfasts. We won't confuse you with technical "insurance speak"  our representatives will explain your coverage in simple terms. With hands-on, personal customer service, we guarantee swift communication. As specialist in the industry, we leverage our knowledge and passion to ensure you and your inn are protected.





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