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Liquor Service at Your Functions: Minimizing the Risk of Liability

Legal Counsel for Philanthropy and the Nonprofit Sector

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Liquor Service at Your Functions: Minimizing the Risk of Liability

The following outline was included as part of a presentation on nonprofit risk management to the New England Museum Association by Attorney Jeffrey M. Hurwit.

SERVING LIQUOR AT YOUR ORGANIZATION'S FUNCTIONS: A CHECKLIST FOR REDUCING RISK

Contract with Caterer - Ensure that:

  • Caterer obtains all necessary licensing, permits, which should be posted at event.
  • Servers trained in TIPS (Training for Intervention Procedures).
  • Caterer responsible for ensuring no underage service.
  • Your organization's security personnel will be present.
  • Security personnel have right to close bar, expel guests, call police.
  • No on-site storage of liquor before or after event.
  • Caterer protects premises from food, liquor damage.
  • No alcohol served within thirty minutes of end of event.
  • Waiver of liability, indemnification by caterer.
  • Insurance:
    • Caterer's insurance certificate provided upon contract signing
    • Your organization is named as additional insured (by rider or endorsement)
    • Amounts: $1-2 million each general and host liquor liability insurance.

Rental Agreement for Use of Your Venue or Facility

  • The outside group/lessee agrees to use caterer pre-approved by your organization.
  • Lessee's own agreement with caterer contains all the elements listed above.
  • Same understanding with lessee regarding security as above.
  • Disclaimer of liability, indemnification – agreement that no liability to your organization for harm to patrons, guests, etc.

Insurance

  • Two basic types of insurance: General liability and D&O (director and officers)
  • No generally accepted industry practices in this area: liquor liability may be specifically excluded or included.
  • As often as not the policy is silent on the matter.
  • Recommend reviewing policy periodically, not simply renewing annually.
  • Ask insurance agent specifically if liquor liability and other foreseeable risks are covered.
  • Amount: At minimum $1 - 2 million each (general, D&O, liquor liability).
  • If special event insurance needed, cost: $300-500 without liquor, $700 or more with.
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