How to Minimize Civil Liability; Recommendations for Sellers and Servers of Alcoholic Beverages



Donald J. Simonini, Consultant ::::
Business owners that hold licenses to sell or serve alcoholic beverages (licensees) must follow regulations set forth by the host state as part of the terms of their licenses. Failure to remain in compliance with regulations can result in fines, suspension of licensing privileges, forced divestiture, or revocation of the license. Additionally, licensees may face civil liability under their Dram Shop coverage. Two typical events that trigger this liability are serving a patron an alcoholic beverage when the patron was intoxicated, and serving a patron who is not of the legal age to purchase alcohol.
Culpability and liability are determined by the laws of the host state, and there are some complexities in the differences of these statutes from state to state. However, there are actions that a licensee in any state can take to minimize their civil liability. The goal of this article is to describe three methods of mitigating the culpability, and companion liability that licensees face in operating their businesses.
Civil Liability
Service of an alcoholic beverage by a licensee to a patron that was determined to be visibly intoxicated, where said patron causes property damage, injury or death to themselves or a third party triggers liability to the licensee. Service of an alcoholic beverage by a licensee to a patron, who was not of the legal age to purchase alcohol, where said patron causes property damage, injury or death to themselves or a third party, triggers liability to the licensee. States such as New Jersey also incorporate the term, “actually intoxicated,” in addition to being visibly intoxicated. The term “actually intoxicated” means a Blood Alcohol Concentration of .15% or greater (milligrams of alcohol per 100 milliliters of blood).
According to the Centers for Disease Control and Prevention, approximately 88,000 people die from alcohol related causes annually. In 2013, alcohol-impaired driving fatalities accounted for 10,076 deaths, which was 30.8 percent of overall driving fatalities. (National Highway Traffic Safety Administration) Licensees of businesses that serve or sell beverage alcohol must maintain a high level of diligence in insuring that proven methods of dispensing alcoholic beverages are followed by their employees.
There are three key methods licensees can use to mitigate risk: Training, Review and Improve Procedures, and Monitoring.
Training of personnel who sell or serve alcoholic beverages is an important step in minimizing exposure to a lawsuit. Personnel involved in management or security functions should also be considered for training because they are able to observe servers, patrons, and their associated activities. Licensees are responsible for the actions or inactions of their employees. Therefore, it is advisable to ensure that employees receive training in the sale or service of alcoholic beverages.
Two of the nationally recognized courses that conduct training related to the sale and service of alcoholic beverages are Techniques of Alcohol Management (TAM) and Techniques for Intervention Procedures (TIPS). These courses focus on:

  • Professional attitude and conduct of servers and sellers of alcoholic beverages
  • Detecting false identification and underage purchasing and possession of alcoholic beverages
  • Identification and proper response to intoxicated patrons
  • Maintaining safety, control, and good customer relations while responding to alcoholic beverage incidents
  • Understanding federal, state and local laws relating to alcoholic beverage sales

Attendees of recognized courses are exposed to various methods of identifying intoxicated patrons, evaluating a patron’s present condition prior to serving alcoholic beverages, continually re-evaluating their patrons for subsequent service, easing into stoppage (flagging) of alcoholic beverage service, making accommodations for an intoxicated patron, and documenting these incidents. Attendees are also exposed to methods of detecting false identification, how to effectively question a potentially underage patron, acceptable and unacceptable forms of identification, what constitutes a good faith effort to determine a patron’s age, and more.
A well trained staff is less likely to serve an underage patron or patron that is visibly or actually intoxicated.
After training is completed, it is recommended that licensees and their management staff review their current systems and procedures, and determine if they are sufficient as is, or require modifications to meet the goals and objectives of the training course. For example, a licensee or an employee of the licensee may have known that they are not to serve intoxicated patrons alcoholic beverages, but were unaware of the importance to insure the safety of the intoxicated patron once they have been identified, and the need to document the incident in writing. A review of procedures following training would highlight this deficiency in existing policy, and corrective measures can be implemented.
If there is an Employee Handbook or Standard Operating Procedures (SOP) manual utilized by the establishment, the licensee or management must ensure that the content of these guides is current, and in compliance with accepted methods and procedures of dealing with underage and intoxicated patrons. Licensees should require written documentation that their staff has reviewed and understands the company’s written procedures or SOPs.
Following training and a review and updating of procedures, the licensee must monitor.
It is the licensee’s and management’s duty to continually monitor their servers and support personnel to insure that they conduct their work as they were trained to do, and follow any revised procedures or policies newly enacted. Continuous monitoring is an essential follow up component of training and revision of policies and procedures.
Another method of monitoring servers is the use of surreptitious surveillance inside the licensed facility. There are firms that can be employed to covertly monitor the activities of servers and other key personnel by posing as patrons. These monitors can remain on the licensed premises for several hours, noting the level of compliance with established procedures, and observing server and management responses to incidents that occur during the surveillance. A licensee can also request that the firm set up scenarios to test the effectiveness of systems designed to prevent two key liability triggers: service to minors and service to intoxicated patrons. For example, two “undercover” agents are sent, and one of them drinks (or pretends) to drink themselves to a level of intoxication. In this scenario, the agents observe the actions taken by the staff present so they can be further evaluated after the surveillance. These firms also send younger looking agents who then attempt to purchase beverage alcohol without proper identification. This scenario tests the systems implemented by the licensee to detect improper identification and prevent sales to minors.
Civil liability is a serious business risk for owners of businesses that sell or serve alcoholic beverages. Two key risk factors are serving alcohol to minors and serving intoxicated patrons. This article describes three important actions that licensees can take to minimize these risks.

  • Training applicable personnel in approved methods and techniques of dealing with intoxicated patrons and underage patrons
  • Reviewing the policies and procedures of the organization to insure that they support approved training methods and techniques of dealing with intoxicated patrons and underage patrons, and revising or enacting policies and procedures where needed to insure that they support approved training methods and techniques of dealing with intoxicated patrons and underage patrons
  • Monitoring personnel involved directly or indirectly with the sale or service of alcoholic beverages to insure that they are in compliance with the organizations policies and procedures

By taking the above described actions, a licensee of an establishment serving or selling alcoholic beverages, has taken a positive step in reducing their civil liability.
To request the curriculum vitae of Donald J. Simonini, consultant with DJS Associates, please email Mr. Simonini at or via phone at 215-659-2010.

Centers for Disease Control and Prevention. Alcohol and Public Health: Alcohol-Related Disease Impact (ARDI). Available at

National Highway Traffic Safety Administration. 2013 motor vehicle crashes: Overview. Available at

Categories: Alcohol | Donald J. Simonini

Tags: Alcohol | Donald J. Simonini


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