Thanks God, It’s Friday! That’s what T.G.I.F means……
My friend who had some “happy hours” drinking session, drank one mug too many, rubbed his arm against some chicks’ busts….. then whacked by some weirdos and busted with his face falling first into the urinal? I saw him lying in this embarrassing position – sorry, Jack, need this snapshot for my blog! Anyway, he was alright, not too bad, at least his face was not restructured by the asshole.
We file an official complaint with the Pub’s establishment and insisted that the management should be held liable for the unwanted bashing. We demanded the Liquor Liability Insurance from the pub, but they have none….. but despite having no such insurance, the proprietor still argue with us that their Public Liability Insurance would compensate my friend. Despite much argument, nothing got out of it but eventually the proprietor apologise to my
friend and wanted to buy us two rounds of Hoegaarden beer (1 pint…… ha! where to find, I told my friend!).
So during the drinks, the proprietor (he introduced himself as Ah Chai……) – quite a nice chap, although looks elderly but very fashionable – You see what I meant? He enquired about the Liquor Liability insurance which we most happily shared with him….
Liquor Liability Insurance coverage in a nutshell
Liquor liability insurance is designed to defend the insured against charges of negligence related to the service of alcohol and indemnify the insured for their financial loss if legal liability is found.
Alcohol serving, like Ah Chai’s Pub operations can be subject to charges of legal liability when, for example, 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. Legal liability can also arise out of other negligent actions or inactions. Assault and battery accounts for about half of liquor liability claims so any liquor liability policy should include coverage for this exposure.
Any Pub operation that is selling or serving alcoholic beverages needs this protection since the commercial general liability (CGL) or Public Liability (PL) policy excludes legal liability directly linked to accidents or occurrences resulting from any use or
consumption of alcohol. Remember the 1 Jan 2009 Bangkok nightclub inferno that took way more than 50 over lives? Well, you may get a nasty insurer telling you that this is not payable and that is not payable because those people were drunk, thus losing their way…..and unable to find their way out! And these things can come your way when everyone is suing you and your pub operations for compensation!
Ah Chai… certainly do not want this to happen.
In essence, Liquor liability insurance typically covers the cost of damages and all legal fees and related expenses up to the policy limits.
Premium costs…. Loadings, Surcharge and Discounts
Like most forms of insurance, liquor liability premiums are based on exposure and the historical losses of the insured operation. Most underwriters do not like news-making claims – this means higher premiums “loading”. Rates are especially high for establishments with a poor claims history and those having unique exposures such as pool tables, live music, exotic dancers or other forms of live entertainment. Owners of operations with these histories or exposures typically pay a premium “surcharge.”
Mind you, there are not many players in the Malaysian market for this class of business and the overall rates are somewhat higher than most CGL or PL policy.
Insured may consider alcohol-awareness training for the staff. Many liquor liability carrier offer discounts for such training. Alcohol awareness training is a good starting point and should be required for all management and staff who serve alcohol. Servers learn to identify patrons who have had too much to drink, how to avoid serving under-aged customers, when to make and keep notes and more. Servers also learn the consequences of failing to take responsibility for their patrons as many servers assume that they will not be held personally responsible for serving an intoxicated customer, but this may not be the case in the years to come…. at least this is happening in Malaysia, a Muslim dominant nation!
Security personnel should also be trained. Unfortunately security staff may be overzealous in their duty, using stun guns, mace and physical force to restrain patrons. Such attacks, ironically, endanger rather than protect a business.
Training is essential but only if managers and owners take it seriously. Managers and owners should monitor their staff and make certain everyone is consistently applying the lessons they’ve learned. Several training programs exist to aid alcohol-serving entities in their quest to become better at protecting their clients and staff and potentially lower their liquor liability premium at the same time.
Availability of Liquor Liability Coverage in Malaysia
Generally, Liquor Liability policy is not commonly available in this country, not issued on standalone policy. Thus, if any insurer will to provide one, this would be through extending the Insured’s CGL or PL’s policy by removal of some exclusions having sensitivity to liquor liability. Even if this is done, there would be sub-limit being applied to the extension – usually not going to be higher than RM500,000 – main reason, most obligatory or treaty reinsurers are not in favour of such coverage.
A special thanks to friendly blogger: Christopher J. Boggs, CPCU, ARM, ALCM who usually blogs at MyNewMarket.com
So did Ah Chai bought in with our sales talk? We were just drunk after many rounds of Hoegaarden…..