New Law Mandates Dram Shop Insurance for Bars

Note: This was featured as part of our Wednesday segment on Charleston’s 105.5 The Bridge with Box in the Morning. You can catch us every Wednesday morning at 8:50 am ET for the latest law tips and legal news. You can listen to the segment below:

According to a new South Carolina law, bars are now liable for over-serving an inebriated customer.

As of July 1st, a liability insurance policy of minimum $1 million is required for all operating “dram shops,” i.e. establishments which sell and serve alcoholic beverages. Bartenders are also required to take preventative measures against a customer drinking excessively and driving.

To be prosecuted under the Dram Shop Law, the establishment must be shown to have continued to serve despite knowledge or common sense showing that the client was under the influence.

Advice for Bars and Bartenders: How to protect your business and your clients

Don’t drink with customers

The Dram Shop law aims to prevent over-serving to any and all customers, whether they have sat on a bar stool for hours or just stumbled through the door. Receipts and credit card statements are easy to track in the event of a customer leaving the bar and causing an accident. If a bartender is intoxicated while working, he or she is unable to assess the behavior of clients and serve them accordingly.

Train bartenders to recognize a client under the influence

Many bars train their staff to recognize when a customer is in a dangerous situation and arrange for a ride to take him or her home. Bartenders must make reasonable judgement calls about customers’ alcohol consumption and stop serving if there is evidence of obvious intoxication.

Be aware of your surroundings and the atmosphere in the bar

Although bars are often loud, overcrowded, and overwhelming, staff must intervene if they notice a customer falling to the ground or struggling to talk. Customers at or around the bar must be monitored for belligerent behavior and helped home if necessary.

Seek advice from legal counsel and buy liability insurance

In the past, victims of drunk driving had no source of financial recompense for a life forever changed by someone who kept taking shots instead of a cab home. To comply with the new law, file the required paperwork immediately and be prepared to prove that your establishment is properly insured. If you are worried about an unfair lawsuit, keep in mind that an investigation will have to prove that a bar “knew or should have known” to stop serving an intoxicated customer.