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How Does Insurance Coverage Verification Work in a Texas Third-Party Dram Shop Case?

  • Last Updated: March 3rd, 2023
  • By: Mike Grossman
  • Dram Shop

Third Party Dram Shop Case - Step 3: We verify the bar's insurance or other source of assets.

Let's say you have gone through months of waiting on your case's investigation to be completed, had your lawsuit filed, taken the case to court, and the jury comes back with a verdict in your dram shop case against the bar that sold alcohol to the drunk driver who hurt you. You're sitting next to your lawyer, and you hear that you've won. The jury sided with you. The bar was culpable, and your damages have all been proved up. You are awarded a judgment of $500,000 for your losses.

Isn't that the end of the story? All that hard work you and your lawyer put in are finally paying off?

Questions answered on this page:

  • Why role does the bar's insurance play in a Texas Dram Shop case?
  • Why is the bar's insurance carrier important knowledge for your case?
  • How does the bar's insurance help you recover fair compensation?
  • How does hiring an experienced Dallas-based attorney help my Texas Dram Shop case?

If you are interested in the other steps in pursuing a Texas dram shop lawsuit they are:

Why insurance is important in dram shop cases.

When a jury awards you a verdict, the defendant is required to hand over your money. The only problem is: what if the defendant doesn't have any money? What if the bar you sued was basically broke anyhow? Bars and restaurants are often limited liability corporations, meaning, the owners are not personally liable for any of their business's losses. The money will have to come out of the business itself in most cases.

In other cases, bars' owners may be personally liable for the judgment, but they don't have $500,000 in collectible cash either. In Texas, citizens are allowed broad "homestead exemptions" for their own personal property. This means that their home, cars, jewelry, and most personal items are often exempt from being seized. You need to be able to collect on your judgment if you are successful in your lawsuit. There's no point in putting yourself through the process for no chance of financial recovery.

However, many bars do have liability insurance for the overservice of alcohol. When that happens, there can be up to a million dollars in available money. In most cases, this is the only real money we can go after.

Why it's important to find out early.

In our many years of practicing dram shop law, we have learned how to get as close as possible to determining from the start if filing a lawsuit is worth the trouble. The following scenarios can help better flesh out how this process works:

  • A judgment is entered against a large chain restaurant that negligently oversold alcohol to an obviously intoxicated man who later crashed into your car. The chain has very substantial financial resources ready to cover its losses. Enforcing a judgment against the chain should be relatively easy.
  • A judgment is entered against a restaurant with insurance that negligently oversold alcohol to an obviously intoxicated man who later crashed into your car. The insurance company will be forced to pay, albeit within the policy limits the restaurant had contracted for. Anything additional will have to come from the restaurant itself. This could be feasible or next to impossible depending on the financial circumstances of the restaurant.
  • A judgment is entered against a bar that negligently oversold alcohol to an obviously intoxicated man who later crashed into your car. The bar is owned by a "serial entrepreneur" who moves his liquor license around when he incurs judgments or can't pay his rent. He has no reachable financial assets and adamantly refuses to pay anyhow. This represents your least promising scenario.

With the initial investigation, filing the lawsuit, doing discovery, and the many necessary filings with the court, dram shop cases can take over a year. Do you really want to go through all of that when there's no compensation to warrant it? We don't put our clients through that process for no good cause.

Call the right dram shop lawyer today.

It's important to note that discovering who owns what is not a simple task. Your experienced Texas drunk driving and dram shop lawyers will need to do careful research and investigative work to determine if the negligent establishment is even worth going after. Fortunately, our attorneys have extensive experience in finding out who can and cannot be sued. As we do in our other areas of practice, we have to tools needed to go out and find our clients money, if it at all can be found. Call us at (855) 326-0000 to learn how we can do that for you.

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