Gerald Franklin Agency

How Dram Shop Laws Apply to You

bartender pouring a cocktail as permitted by Texas liquor license
bartender pouring a cocktail as permitted by Texas liquor license
Dram shop laws can apply to you when you serve alcohol under the permission of a Texas liquor license.

If you own a bar, restaurant, or any business in Texas that has a liquor license to serve alcohol, you face potential legal and financial disaster if you don’t take liquor liability seriously. Imagine if a patron leaves your establishment drunk and causes a fatal car accident. Could you, as the business owner, be held responsible?

The answer is yes. Texas has what are called Dram Shop Laws. These laws make establishments that serve alcohol liable for the actions of patrons who became intoxicated on their premises and then go on to cause harm or injury.

Dram Shop Laws are incredibly complex and the consequences of getting it wrong can be devastating for your business. It’s essential to fully understand not only what these laws are but how you can take steps to protect yourself and your livelihood.

If you need help navigating the licensing process, contact Gerald Franklin. We’re an experienced Texas liquor license agency that can help you every step of the way. 

Being Found Liable Could Ruin Your Business

Texas Dram Shop Laws, outlined in Chapter 2 of the Alcoholic Beverage Code, are particularly focused on the establishment’s role in serving someone who was “obviously intoxicated” to the point where they became a danger. This means that it’s not enough for an accident to happen; the injured party must also prove that the business should have reasonably known the patron was a risk and continued to serve them anyway.

Here are some scenarios where your business could face Dram Shop liability:

  • Visibly Intoxicated: A patron shows clear signs of intoxication (slurred speech, stumbling, loud/aggressive behavior) and is served additional alcohol.
  • Over-Serving: Someone is served to the point where they become increasingly intoxicated at your establishment. This could be multiple drinks in a short period or disregarding signs of impairment.
  • Serving Minors: This is a clear violation, and if a minor subsequently causes harm, your business could be held responsible.

It’s also important to note that Dram Shop Laws don’t just apply to drunk driving accidents. Injured parties can seek damages if an intoxicated patron you served causes:

  • Property damage
  • Physical assault
  • Other injuries to themselves or others

The penalties for a Dram Shop violation can be severe. You could face heavy fines, suspension or loss of your liquor license, and even jail time in extreme cases. Unfortunately, the financial and reputational damage to your business could be irreversible.

Strategies for Minimizing Your Liability

The good news is that you don’t have to live in fear of Dram Shop Laws. There are proactive steps you can take to significantly reduce your risk and protect your business.

  • Implement Staff Training: Require all employees who sell or serve alcohol to undergo TABC (Texas Alcoholic Beverage Commission) certification, as well as additional in-house training. Cover topics like recognizing signs of intoxication, proper serving techniques, and how to refuse service or intervene when needed.
  • Establish Clear Policies: Have written serving policies in place that outline your expectations for responsible alcohol service. Enforce clear cut-off procedures for patrons who display signs of intoxication. This also means consistent enforcement of your policies to protect your staff, business, and patrons. 
  • Documentation is Key: Maintain detailed records of incidents regarding potentially intoxicated patrons. Include any refusals of service, attempts to intervene, and reports of disruptive behavior. This could be crucial if you do face a lawsuit.
  • Consider Liability Insurance: While not a substitute for proper practices, additional liquor liability insurance can provide vital financial protection in the event of a Dram Shop claim.

Note: The advice we’re sharing in this blog post is for informational purposes and not a substitute for legal advice. For guidance specific to your business, you may want to seek out an attorney specializing in liquor liability.

Manage and Maintain Your Texas Liquor License

Texas Dram Shop Laws are a serious matter, but they don’t have to spell disaster for your business. Remember, proactivity is your best defense. This means implementing staff training and enforcing clear policies. We can help by making sure you have the appropriate Texas liquor license in place. Contact our team at Gerald Franklin for assistance with the licensing process.