Liquor Liability Insurance in Texas

Chapter 2 of the Texas Alcoholic Beverage Code, the dram shop law, allows a claim against a business that provided alcohol when, at the time of service, it was apparent that the customer was obviously intoxicated to the point of being a clear danger to themselves and others, and the intoxication was a proximate cause of the damages. The same chapter can make an adult who is not the minor's parent, guardian or spouse liable for damages caused by a minor's intoxication if the adult knowingly provided the alcohol or knowingly allowed the minor to be served on property the adult owns or leases.

Section 106.14 of the code provides a safe harbor. An employee's sale to a minor or an intoxicated person is not attributed to the employer if the employer requires its employees to attend TABC approved seller training, the employee attended, and the employer did not directly or indirectly encourage the violation. TABC notes that state law does not require each server to be certified, that certification lasts two years and that its standards look for written responsible service policies and certification within 30 days of hire. Keep certificates on file for every server and bartender.

Texas does not set a general requirement for bars and restaurants to carry liquor liability insurance, though bills to create one have been filed in past legislative sessions. Landlords, lenders, event venues and festival organizers commonly require it, often at $1,000,000 per occurrence with the venue named as additional insured. General liability policies usually exclude liquor claims for businesses that sell or serve alcohol, so the coverage is bought as its own policy or added by endorsement.