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Senate passes liquor liability insurance reform

The Alabama Senate unanimously passed a “common sense” bill centered on liquor liability insurance reform.

The legislation was sponsored by Sen. Chris Elliot (R-Josephine), whose goal was to bring about “common sense insurance reform and increased personal responsibility.”

“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,” he said. “Our businesses were reeling from the effect and cost of this antiquated law, and I appreciate my colleagues support in fixing this problem.”

Elliott was referring to  the Alabama Dram Shop Act. The legislation was enacted in 1909 and originally meant to protect establishments that sold alcoholic beverages. The term “Dram,” as defined in the act, refers to a bar, restaurant, or any other place where alcohol is served.

Currently, there are just three insurance carriers that provide policies to retail establishments and require $100,000 in coverage that, as of now, can cost businesses more than $35,000 yearly.

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.

The newly passed legislation seeks to “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. If the legislation were to be adopted, that case would be overturned.

Groups supporting the legislation are 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.

Austen Shipley is a staff writer for Yellowhammer News.

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