Can Liability Insurance Curb Drunk Driving?

A Texas lawmaker filed a bill to make all bars in the state carry minimum liability insurance.

By Brenda SalinasMarch 16, 2015 10:34 pm

One thousand three hundred and thirty-seven Texans died in crashes caused by alcohol in 2013. Fourteen of those fatalities happened in Rep. Chris Turner’s Arlington district.

“We’ve seen cases, tragic cases unfortunately, where someone was over-served in such an establishment went out and caused a terrible accident, Turner says. “And then the family that was injured is trying to recoup some damages because of medical costs and the bar simply goes out of business because they have no liability policy.”

Turner filed a bill to make it mandatory for all bars and restaurants that generate at least 50 percent of their revenue from alcohol to buy liability insurance.

“You have to have insurance to own a home, you have to have insurance to drive a car, and now in this country you’re required to have health insurance with very few exceptions,” Turner says. “In an industry where you’re selling a product that, while completely legal, can, if abused, be a very dangerous product, you should also have liability insurance.”

Turner argues that making insurance mandatory would lower the sticker price of alcohol liability insurance across the state and eventually curb drunk driving.

“By having a requirement that you have to have insurance in order to hold a beverage permit hopefully that will help create a situation where bars are very careful to make sure they don’t do anything that will cause their insurance policies to have to pay out for somebody being injured or lose their policy for somebody being injured,” Turner says.

Some business owners are skeptical. Greg Wilson owns Radio Coffee and Beer in South Austin.

“Nah, I think that sounds pretty stupid actually,” Wilson says. “Any businessman or woman knows that there is potential liability in owning a bar and they don’t need the legislature to pass a law in order to inform them of that.

“So no, I don’t think it’s going to make anybody more responsible or less responsible.”

In fact, Wilson thinks Tuner’s proposal might even make some bar owners less careful.

“The incentive would be even greater to be careful if you didn’t carry insurance because then you’d be putting your whole livelihood at risk, all your assets,” Wilson says. “Insurance limits your risk that’s the reason you buy it.”

You might be surprised to know Wilson actually carries liability insurance on his bar. He says it’s a good business practice. Most people in the industry agree, including J.C. Diaz with the national Nightlife Association.

“We don’t feel that there should be some sort of mandate or some sort of bill that should come across the board,” Diaz says. “But we do feel that businesses should carry liability insurance, not only as a venue, but as a venue owner as well.”

In fact, Diaz says, the government should be working to protect small business owners from frivolous lawsuits. He argues the law is already too hard on bartenders and venue owners.

“As an individual I know that I’m responsible for my actions,” Diaz says. “If I go to a bar and whether I pregame it or I’m drinking too much there or I’m taking a bunch of shots, whatever it may be, the responsibility falls on me.”

While personal responsibility is not on the legislative session’s agenda this term, it’s accepted that if you over-serve someone and they get in an accident, you’re going to get sued.

But whether or not you have to get insurance for that, Representative Chris Turner hopes that will be up for debate very soon.