An overview of insurance for bars in dram shop cases:
When people are hurt because a bar or restaurant sells too much alcohol to a patron who later causes an accident, they're in need of more than an apology: they need money. Victims of these accidents are out some combination of medical bills, lost wages, pain and suffering, disfigurement, and other damages. That's what dram shop cases are ultimately about--getting victims the money they'll require to try and put their lives back together, while holding irresponsible businesses accountable for the damage that they cause in the community.
One of the primary sources of compensation for victims in any accident is insurance. In this article, experienced dram shop attorney, Michael Grossman, discusses what role insurance plays in dram shop cases.
For more general information, make sure you click over to our popular Guide To Dram Shop Law now.
Questions answered on this page:
- What role does insurance play in alcohol-related accidents?
- How does insurance work in Texas dram shop cases?
- Are alcohol providers require to have insurance under Texas Law?
- How can an experienced dram shop lawyer help with your case?
Why insurance matters for alcohol-related accident victims.
It's impossible to understand why insurance matters without knowing a little about corporate law. People form corporations to insulate themselves from most forms of liability. This is why a large percentage of businesses are corporations. For those who are incorporated, if during the course of their business, someone is injured, the personal assets of the owners of the corporation are shielded from use as compensation to the victim. The stockholders' homes, cars, and money in their bank accounts are protected from potential injury recovery.
When looking more specifically at dram shop law, bars, restaurants, liquor stores, and other commercial providers of alcohol are almost always organized as corporations. As such, if they're sued for violating the dram shop laws of Texas, their owners' personal assets cannot be collected. Only the bar's money and/or assets are available to compensate victims of improper alcohol service. And here's a secret: outside of giant corporate players like Darden and Landry's, bars and restaurants have precious little in assets. They may have some liquor, a little food, a couple of sticks of furniture, and some petty cash, but that's usually about it.
How do victims get compensation in dram shop cases? In the best case scenario, the establishment has a liquor liability insurance policy. Unfortunately, according to insurance industry sources, only 35% of businesses that should have liquor liability insurance actually have that protection. This means that in many dram shop cases, it can be difficult to locate assets even when a victim is awarded compensation by a jury.
For this reason, during the last few sessions of the Texas Legislature, bills have been produced to require those with liquor licenses to carry liquor liability insurance. Unfortunately, mostly due to efforts from hospitality industry lobbyists, those bills have not been enacted into law, and alcohol-serving establishments in Texas are not required to carry insurance.
The lack of insurance doesn't mean that it is impossible to recover in dram shop cases. Many bars and restaurants are so profitable and so heavily invested in their brand that to shut down and start over as another company to avoid paying a judgment would be a suicidal business decision. However, the lack of insurance in some cases means that some victims can be forced into accepting insultingly low settlements or risk the prospect of winning the case, but not being able to collect any of the compensation, because the bar's owners have their assets shielded by corporate laws.
How does insurance work in dram shop cases?
Time and again, we meet people who have the entirely-reasonable assumption that insurance is more or less automatic. If something bad happens, the insurance company has to pay out. That's why they even exist, right? Especially in dram shop cases, where liquor liability policies are present, people can assume that situations like theirs are exactly what insurance is for. Just because an insurance company covers someone who is responsible for someone's injuries, they have no legal obligation to pay an injured person. The only way to make an insurance company pay is to take them to court and prove that liability for an accident rests with their client.
Insurance companies don't make money paying out on claims, but by NOT paying claims to people, even those who are entitled to it. That's the dirty little secret of the insurance business--if they're not reasonably convinced that a jury will award someone money and that they have a lawyer capable of getting that done, then they'll simply ignore the victim of alcohol over-service and hope the problem goes away.
Of course, the very real injuries sustained by the victims of irresponsible alcohol service cannot be simply wished away. That is why an experienced dram shop attorney who knows how to hold alcohol establishments and insurance companies responsible for reckless alcohol service is absolutely critical for those who wish to obtain full compensation.
Further, we handle more of these cases than almost any firm in Texas, and we can't tell you how many insurance adjusters and even defense lawyers don't understand the law. They tend to think that they're not especially exposed to liability, that juries don't like these cases, and that their clients didn't do anything wrong. After conducting a thorough investigation, including obtaining the necessary material to undermine safe harbor defenses, both bars and insurance companies usually get a pretty rude awakening. That is part of why Grossman Law Offices has successfully litigated so many dram shop cases.
To get the insurance company to listen, hire an experienced dram shop attorney.
Sadly, for many people who have been victimized by reckless alcohol services, most personal injury lawyers are simply not equipped to see dram shop cases through to a successful conclusion. At the same time insurance companies will aggressively defend their clients in an effort to prevent having to pay compensation. When you hire the aggressive dram shop lawyers at Grossman Law Offices, it shows the insurance company not only how serious you are, but that you have one of the most experienced group of dram shop attorneys in the state. We'll fight to get you the compensation you need, while holding bars who ignore the law accountable for their dangerous behavior.
If you think that you may have been the victim of a bar's over-service, call us at (855) 326-0000.
If you have been injured because of an establishment's alcohol over-service, you may be interested in the following related articles:
- Texas Law Doesn't Require Bars to Carry Liquor Liability Insurance
- How First-Party Liability Works in Texas Dram Shop Cases.
- What Does the Term "Obvious Intoxication" Mean in Texas Dram Shop Cases?