Last Updated: 1/2/2024
Sometimes, just one drink turns into a few and a few turns into an inability to drive, think straight, or act politely. This can result in belligerent patrons who then injure or harm others as a result of their intoxication.
Did you know that you could be held responsible for a situation like this if you were the one serving or selling alcohol? It’s true—you may then be forced to pay out of pocket for legal and medical fees if you don’t have liquor liability insurance—all because of dram shop laws.
As someone who sells or serves alcohol as part of your business operations, getting familiar with your state’s dram shop laws (liability laws concerning selling and serving alcohol to minors or intoxicated people) is critical to understanding the risks of your industry. Understanding these risks is the first part of taking the necessary steps to protect your business from financially damaging claims with liquor liability insurance.
Below, we go over what dram shop laws are, and why they make having liquor liability and dram shop insurance so important if you were ever to get sued for overserving alcohol. Let’s dive right in!
What Are Dram Shop Laws?
Dram shop laws allow people who were victims of someone’s drunken behavior to file a civil suit against the party that provided them alcohol.
The specifics vary from state to state, but for the majority, you can easily be sued for overserving someone or serving alcohol to a minor, which then results in the entire establishment being sued. Some states only make dram shops liable if the person who caused the accident was underage, while other states set damage caps on any awards.
Liquor liability insurance came about as a result of dram shop laws.
These laws can also extend to social events involving alcohol where someone is hosting a gathering for friends, family, or coworkers and they are sued as a result of an over-intoxicated individual causing property or bodily damage.
Which States Have Dram Shop Laws?
Currently, 42 states and the District of Columbia have dram shop laws. Use our directory below to learn more about dram shop laws in your state.
Dram shop laws in Alabama
If you illegally sell alcohol to someone who is visibly intoxicated
Dram shop laws in Alaska
If you sell alcohol to someone who is underage or drunk
Dram shop laws in Arizona
If you sell alcohol to someone who is underage or visibly intoxicated
Dram shop laws in Arkansas
If you sell alcohol to someone who is underage or visibly intoxicated
Dram shop laws in California
If you sell alcohol to visibly intoxicated minors
Dram shop laws in Colorado
If you sell alcohol to someone who is underage or visibly intoxicated
Dram shop laws in Connecticut
If you sell alcohol to an intoxicated person
Dram shop laws in Florida
If you sell alcohol to alcoholics or underage people
Dram shop laws in Georgia
If you sell, furnish, or serve alcohol to someone who is underage or visibly intoxicated
Dram shop laws in Idaho
If you sell alcohol to someone who is underage or visibly intoxicated
Dram shop laws in Illinois
If you cause someone to become intoxicated (740 ILCS Section 58/5 is a separate law covering situations involving minors)
Dram shop laws in Indiana
If you furnish alcohol to someone who is visibly intoxicated
Dram shop laws in Iowa
If you sell alcohol to someone who is visibly intoxicated
Dram shop laws in Kentucky
If you sell alcohol to someone who was already intoxicated
Dram shop laws in Louisiana
If you sell alcohol to someone who is underage
Dram shop laws in Maine
If you serve alcohol to someone who is underage or visibly intoxicated
Dram shop laws in Massachusetts
Liquor laws don’t allow statutory action, but courts allow lawsuits against businesses and hosts in many situations
Dram shop laws in Michigan
If you sell alcohol to someone who is underage or visibly intoxicated
Dram shop laws in Minnesota
If you illegally sell alcohol (Section 340A.90 covers hosts and underage drinking)
Dram shop laws in Mississippi
If you illegally sell or serve alcohol to someone who is visibly intoxicated
Dram shop laws in Missouri
If you serve alcohol to someone who is visibly intoxicated or underage
Dram shop laws in Montana
If you furnish alcohol to someone who is visibly intoxicated or underage
Dram shop laws in New Hampshire
If you negligently serve alcohol to someone who is underage or intoxicated, or if you recklessly serve alcohol
Dram shop laws in New Jersey
If you sell alcohol to someone who is underage or visibly intoxicated (Section 2A:15-5.6 covers social hosts)
Dram shop laws in New Mexico
If you sell alcohol to someone who is underage or visibly intoxicated
Dram shop laws in North Carolina
If you sell alcohol to someone who is underage and they cause a car accident
Dram shop laws in North Dakota
If you sell alcohol to someone who is visibly intoxicated, underage, or incompetent
Dram shop laws in Ohio
If you serve alcohol to someone who causes injuries or property damage off of your premises
Dram shop laws in Oklahoma
If you knowingly sell, deliver, or furnish alcohol to an underage person or someone who is incompetent
Dram shop laws in Oregon
If you serve or provide alcohol to someone who is visibly intoxicated, or if you provide alcohol to someone who is underage and the plaintiff can prove you reasonably should’ve requested ID or noticed that the ID presented was not legitimate
Dram shop laws in Pennsylvania
If you sell or provide alcohol to someone who is underage or visibly intoxicated
Dram shop laws in Rhode Island
If you are negligent or reckless in serving alcohol to people who are underage or visibly intoxicated
Dram shop laws in South Carolina
If you sell alcohol to someone who is underage or visibly intoxicated
Dram shop laws in Tennessee
If you sell alcohol to someone who is underage or visibly intoxicated
Dram shop laws in Texas
If you serve or provide alcohol to someone who is visibly intoxicated or under the age of 18
Dram shop laws in Utah
If you sell alcohol to someone who is underage or visibly intoxicated
Dram shop laws in Vermont
If you sell alcohol to someone who is underage or visibly intoxicated
Dram shop laws in Washington
If you sell alcohol to someone who is visibly under the influence or underage
Dram shop laws in Washington, D.C.
If you sell or deliver alcohol to someone who is underage or visibly intoxicated
Dram shop laws in Virginia
If you violate any liquor laws in the state
Dram shop laws in Wisconsin
If you sell, dispense, or give away alcohol to someone who is underage
Dram shop laws in Wyoming
If you illegally provide alcohol to someone
What Is Liquor Liability Coverage?
Liquor liability insurance, also known as dram shop liability insurance, is designed to protect you against third-party claims that your involvement in serving alcohol to a person harmed that third party or their property.
For example, let’s say a restaurant unknowingly overserves alcohol to someone and they then drive home intoxicated. The driver gets into a collision where not only the vehicles are totaled but the other driver and passengers are severely hurt. On top of it all, the crash has caused property damage.
These individuals now have extensive hospital bills or even lifelong damage and decide to sue the driver along with the restaurant that served them and everyone they can name on the suit. If you carry dram shop insurance, you may receive protection against claims like these so you aren’t left having to pay legal, medical, and other related fees entirely out of pocket.
Do I Need Liquor Liability Insurance?
If your business sells, manufactures, distributes, or furnishes beer, wine, or liquor, you need liquor liability coverage. Just one lawsuit could completely wipe out your business.
Defense lawyers charge an average of $300 an hour. Could you afford legal representation on your own for something that could take months or even years to resolve?
In 2017, a woman was over-served alcohol at a New Jersey bar and decided to drive home drunk. Along the way, she collided head-on with another vehicle, causing a child in the car to sustain a brain injury that drastically changed their quality of life. This lawsuit was settled in 2020 for $4.4 million.
With liquor liability insurance, you could have the protection you need to get you through dram shop lawsuits, should one ever happen to you. If you or your business were to be sued for overserving someone or providing alcohol to a minor, your policy would be in place as a safety measure to potentially help cover the costs associated with the lawsuit.
Buying insurance can be a daunting task, but Insurance Canopy makes it easier than ever with an online application. Just follow these steps to get covered:
- Select the coverage you need
- Choose your limits
- Submit the application
- Receive your certificate of insurance once your payment has processed
Whether you’re looking for liquor liability for a restaurant, a bar, or private social events, Insurance Canopy can help you find the right coverage in 15 minutes or less.
Knowledge Is Power
By understanding dram shop laws in your state, you can take the necessary steps to protect your business with liquor liability insurance. Learn more about dram shop laws and get insured today!
