How to Prevent the Effects of Underage Drinking on Your Restaurant Business

Having spent so much money and time to get your liquor license, the last thing you want is to compromise it by selling alcohol to a minor. The process following the sale of alcohol to a minor will vary, depending on the circumstances and the state your business is located in; however, it is illegal to sell alcohol to a minor in any state.

Regardless of where your establishment is located in the country, it’s vital to ensure that you and each member of your staff know the laws and rules, and have policies in place to prevent underage drinking from occurring in your establishment.

Liquor Liability

Anyone who sells or serves alcohol can be held liable for any injuries or damages caused by those who consume the alcohol you sell them. Enforcement of this liability can be accomplished via dram shop laws or a general negligence law, depending on the state.

Bartender liability coverage is a smart thing to have, although it cannot protect against the consequences of serving alcohol to minors.

Dram Shop Laws

Dram shop laws govern the legal responsibility of licensees who sell alcohol to customers of all ages, including minors. A small business that sells or serves alcohol to a customer who is already intoxicated, who is addicted to alcohol, or who is a minor is in violation of dram shop laws is going to have a problem.

General Negligence

Covering states that don’t have dram shop laws, general negligence considers whether an establishment took what would generally be considered reasonable action to curb or prevent an intoxicated customer from harming themselves or another person.

What Can Happen if a Restaurant Serves Alcohol to a Minor?

underage female drinking beer at a bar

The specific consequences of serving of alcohol to minors will vary, but generally speaking, a restaurant that serves alcohol to a minor can face charges, fines, and jail time.

In terms of who can be charged for this offense, the employee who sold the alcohol can be charged, fined, and incarcerated, as can the owner of the restaurant and the waitperson who served the alcohol to the underage individual.

The more serious the offense, the more serious the charges or fines. However, if it’s the first offense, a warning, fine, or suspension of your liquor license will be issued. If your license is suspended, your establishment will be prohibited from selling any alcoholic beverages until it has been reinstated. The worst-case scenario is that your liquor license can be revoked.

Process for Reversing a Liquor License Revocation

If your liquor license is revoked and you plead not guilty, the licensing board will schedule a hearing. You will be required to appear before the board on the date of the hearing to plead your case as to why your license should be reinstated. Depending on the circumstances and your state, you may choose or be required to hire an attorney to accompany you to the hearing.

The hearing can see witnesses and evidence being presented by your state’s Liquor Authority. You can also present witnesses and evidence, and cross-examination can occur on both sides. The Administrative Law Judge will present its findings to the State Liquor Authority, which will make the final decision.

This time away from your business can be costly in more than one way. Not being able to keep on top of the happenings at your establishment can leave you vulnerable to further charges or fines if an employee continues to serve alcohol. As well, you will have to pay an attorney to represent you.

Ways to Prevent Underage Drinking

The damage to your business reputation as a result of license suspension or revocation can be devastating. This is especially true if several violations have occurred, regardless whether you were directly or indirectly involved. A much better strategy is to put measures in place to prevent underage drinking and legal ramifications from general intoxication, such as bartender liability insurance.

Thorough ID Checks

As the owner, you are responsible for ensuring that your staff thoroughly check the ID of every individual they suspect is underage. Although this can be difficult when your restaurant is busy, not doing so can have disastrous results.

The best place to check IDs is at the entrance of your establishment. If your establishment has more than one entrance, IDs should be checked at each entrance. Or, you can simply lock those doors and allow customers through one entry only—just make sure people can still exit those doors.

Of course, in order to ensure that each ID is checked thoroughly, you will need to ensure that each employee has been properly and thoroughly trained to recognize the fake IDs which minors will commonly use to be served alcohol.

A Band or Stamp System

Large or busy restaurants can implement a band or stamp system in order to keep track of minors who may attempt to get served alcohol. Those who are underage can be fitted with a wristband or stamped on the back of their hand. This will alert wait staff and bartenders to only serve them food and non-alcoholic beverages.

female bartender about to check patrons idStaff Education

Your staff needs to understand the consequences of serving alcohol to minors. Make it clear to them that even though you are the owner of the establishment, they can be charged, fined, and jailed individually. This can negatively affect their future in terms of getting employment elsewhere, as well as affect their ability to obtain licensing themselves.

Creation and Enforcement of Policy

Although getting liquor liability insurance for bartenders, educating staff, and implementing ID checks and other strategies are all smart ways to protect your business from legal woes, you must also have a way to tie it all together.

This can be done by having a policy in place that includes not only the ways that serving alcohol minors can occur, but which also outlines the steps to take to prevent or mitigate the situation should it happen.

Dealing with certain situations, such as when in doubt about age or level of intoxication, can be difficult for staff to deal with. This is where a simple, yet effective policy can come into play. For example, you can instruct staff to refuse service any time they are in doubt that a person is of age or sober.

When they encounter these situations, staff can simply be instructed to inform the patron that, due to the establishment’s policy, they will not be serving alcohol. This should be done quietly and discreetly in order to preserve the dignity of the patron and ensure that the other patrons can continue to enjoy their experience without interruption.

Should the individual persist and continue to demand to be served, employees should be instructed to remain vigilant and restate the fact that they will no longer be serving alcohol as a matter of policy. At this point, it’s a good idea for the staff member to notify other members of the staff about the individual, to prevent further service.

Does Liquor Liability Insurance Protect You from Underage Drinking?

Despite your efforts to educate staff and implement policies, your establishment can still be open to legal action from customers. Liquor liability coverage is a good idea, as it can provide you with a way to lessen your financial burden. This kind of policy will help you to cover the cost of settlements or judgments, damages from alcohol-related accidents, lawyer fees, and similar expenses.

However, having liquor liability insurance will not protect you, your employees, or your business should a minor be served in your establishment. It is illegal to serve minors country-wide. The only way to do this is to have as many strategies in place as possible to prevent minors from being served alcohol.

Of course, underage drinking is only one of several legal risks for establishments that serve alcohol. You can incur damage to your property as the result of an intoxicated patron or group of patrons. Patrons can sue you for your damages if they drink at your establishment, attempt to drive home, and become involved in an accident. Employees who drink on the job can also become injured.

All of these reasons make having liquor liability insurance a good idea, even if your establishment is located in a state that doesn’t require you to carry it.

Getting the Right Coverage

There are many inclusions and exclusions surrounding liquor liability. When you want to ensure the best possible coverage, it can help immensely to speak with a professional who specializes in coverage for businesses like yours.

The right insurer for you will be the one that will put their qualifications to use and offer flexibility, allowing your policy to be tailored to fit your needs. To learn more about the benefits of liquor liability coverage, contact us and get a liquor liability insurance quote for your restaurant.