Health care

Alabama Senate passes liquor liability insurance reform

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Senator Chris Elliott, R-Josephine, announced today that the Alabama Senate passed legislation dealing with liquor liability insurance reform, with a vote of 29-0. Senate Bill 104, sponsored by Senator Elliott and others seeks to bring common sense insurance reform and increased personal responsibility.

The Alabama Dram Shop Act was enacted in 1909 to protect establishments that served alcoholic beverages. “Dram” according to its legal term, refers to a bar, restaurant, or like where alcoholic beverages are served. To date, there are only three carriers that provide policies to retail establishments and require $100,000 in coverage that currently can cost businesses over $35,000 annually. 

This legislation, in its current form, will create a wider standard with a server having to knowingly serve an intoxicated person, and for that service to be the proximate cause of the injury or death if incurred. According to the Insurance Services Office (ISO), each state is assigned a grade for hazard risk for liquor liability – with Alabama rated as a 10 due to a 1991 case, McIsaac v. Monte Carlo Club, Inc.  With adoption of this legislation, that case would be overturned. 

“I made it a priority to bring all interested parties to the table to find a commonsense solution that help businesses, insurers, and most of all the citizens of Alabama. Our businesses were reeling from the effect and cost of this antiquated law, and I appreciate my colleagues support in fixing this problem,” stated Sen. Elliott.

With the passage of this legislation, the cost of liquor liability insurance for restaurant and bar owners should decrease and allow the businesses the opportunity to purchase higher amounts of insurance protection at a lower cost. This legislation was supported by the following groups: Alabama Beverage Licensees Association, Alabama Brewers Guild, Alabama Grocers Association, Alabama Independent Insurance Agents, Alabama Restaurant and Hospitality Association, Alabama Retail Association, Alabama Tourism Partnership, National Federation of Independent Businesses, and the Petroleum and Convenience Marketers of Alabama. 

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