If your Connecticut business has a liquor license, it may be a good idea to obtain liquor liability insurance. A liquor liability insurance policy may help to cover the cost of attorney’s fees and costs of any damages caused by an intoxicated individual. In some states, you may need to obtain such a policy as a condition of obtaining a liquor license.

Types of businesses that could need extra coverage

Generally speaking, a bar, restaurant or grocery store that sells or serves alcohol could benefit from having a liquor liability insurance policy. It is important to note that this type of insurance is different from host liquor liability coverage. A host liquor liability policy can often be included as part of a general liability policy and is designed for individuals or companies hosting a single event.

You can take proactive steps to reduce your liability

It is generally a good idea to provide training to anyone who may be serving or selling alcohol. Doing so may help individuals spot signs of impairment and prevent them from serving a person who may already be impaired. You or your staff should also encourage patrons to drink responsibly or to call for a ride if they are too drunk to drive themselves home.

However, it is important to note that it might not be realistic to assume that you’ll prevent all of your patrons from driving after getting drunk in your establishment. Regardless of your efforts, if someone causes bodily injury or property damage after drinking at your bar or restaurant, you or your company can be held liable. This may be one of the most important reasons why you should obtain a liquor liability insurance policy.

An insurance defense attorney may be able to come to your aid in the event that another party files a claim against you or your company. Your attorney can assess whether the claim has been properly brought in compliance with your state’s law and may be able to resolve the matter outside of court in a timely manner.

Business owner obligations for property they possess

Business owners are expected to eliminate dangerous conditions on their properties within a reasonable period of time. These conditions can include torn carpeting, loose cables and other tripping hazards, poorly lit stairwells, loose railings and wet floors. Property owners or business tenants can also be responsible for conditions outside the building and must properly address potholes, cracks and ice on sidewalks and in parking lots.

Proving who is at fault for a slip-and-fall claim

A victim of a slip-and-fall accident must prove that:

• A dangerous condition led to the injury
• The owner was in possession and control of the premises and negligent in not addressing the condition
• The victim used the property in a safe manner and had not anticipated the condition
• The owner knew or should have known of the hazardous condition for a certain period of time

Those injured on a business property where the space is being rented out may hold both the owner and the tenant (possessor) responsible. The possessor may even be the property management company in some cases. Building code violations, such as the lack of a handrail in a stairwell, may be used as proof of negligence.

Business owners who are facing allegations regarding slips, trips or falls should seek legal guidance regarding their rights and responsibilities before talking to the alleged victims’ lawyers.

A great deal of claim activity focused on residential and infrastructure projects. The disciplines with the highest claim severity included:

• Structural engineering
• Architecture
• Mechanical engineering
• Civil engineering

“There was a long stretch there where everybody was very happy,” commented a partner at the brokerage Ames & Gough, which performed the survey. “Now, for whatever reason, we are seeing some claims creeping into the market.”

Ames & Gough sent out surveys to 23 professional liability insurers, out of about 40 in the market. Fifteen firms answered the survey, but they accounted for the bulk of the professional liability market share.

The survey found that 80% of the carriers saw professional liability premium growth in 2019 — half with increases of 10% or greater. Forty percent of carriers said they had seen an increase in claims, many by as much as 10%.

“One trend that I am seeing is higher limit demands across the board regardless of discipline and/or complexity of the project. We are inundated daily with specific project excess limit requests,” said the Ames & Gough partner.

With claims up, rates are on the rise

Increasing claims will put pressure on insurance rates, and this is the first time that has happened since the Great Recession. Eighty-two percent of companies surveyed are seeking increases of 5% or less, with the remaining companies raising rates by 6% to 10%.

Some professional liability carriers blame the increasing claims at least partly on “social inflation,” which is the tendency of juries to hand down larger awards than they had in the past. Some specifically pointed to litigation funding firms as a driver of those larger awards.

Regardless of the precise reason for increasing claims, this is an area professional liability insurers will need to take note of. Are your PLI claims rising?