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Liquor Liability and Dram Shop Laws

Liquor liability coverage is designed to protect the insured against the financial consequences of their legal liability when a patron or third party is injured as a result of the negligent service of alcohol or negligence in not preventing an individual from injuring a third party.
But the breadth of coverage (the definition of legally liable) varies by state because each state applies its own codified or judicially interpreted laws.
• In some states, every bar in which the intoxicated person drank can be pulled into the lawsuit; the establishment has to prove that the patron was not or did not appear intoxicated while there. Each bar or restaurant in these states can be held jointly and severally liable.
• At least one state holds the establishment liable if the patron appears intoxicated even if they came in that way and didn’t imbibe there.
• Other states require proof that the establishment sold alcohol to the intoxicated individual, injuries were sustained and the intoxication was the proximate cause of the injury(ies).