What is Dram Shop Liability?

A dram shop, which is a term that originated in England in the 18th century, is basically any commercial establishment that sells alcoholic beverages. Dram shop liability refers to laws that hold bars, pubs, taverns, restaurants, and even private individuals liable for damages that have resulted from serving alcoholic beverages to obviously intoxicated individuals, which include minors. Dram shop laws also help ensure that businesses profiting from alcohol train their employees properly and implement responsible alcohol service policies. 

Dram Shop Liability Laws Vary Among States

Proving that an establishment or a host is liable for damages under dram shop liability laws can be tricky since alcohol tolerance vastly differs from one person to another. For example, a bartender might not be aware that a patron is drinking with an empty stomach, leading to faster and more intense intoxication than usual. Similarly, a bartender might think, due to previous experiences, that a regular patron was walking home instead of driving home. 

What needs to be proven when determining dram shop liability will also differ based on state laws. Each state has different views on who should be held accountable when intoxicated patrons, minors, or party guests cause injuries to others due to intoxication. Also, states that have dram shop laws have varying definitions of the following: 

  • The level of intoxication

  • Patrons or guests

  • Retail or commercial establishments

  • Sales

One thing that states have in common with regards to dram shop liability is the obvious intoxication test. This phrase means that a retailer or employee should have known or knew that a person was so drunk that serving more alcohol would only lead to careless and dangerous actions, including drunk driving.   

Drunk Driving and Dram Shop Liability

Driving under the influence of alcohol (DUI), driving while impaired (DWI), or drunk driving could have catastrophic effects not only for a driver but also for anyone else on the road. It exposes the driver to legal liability for losses resulting from the injuries or death of the victim. In some cases, however, a drunk driver might not have insurance or has insufficient insurance to cover a victim’s damages. 

Fortunately for victims, dram shop liability laws hold an individual or business strictly liable for damages if the individual or business gave or sold alcoholic drinks to a person who was obviously close to being drunk or was already drunk, and the drunken patron causes a drunk driving incident. Because of this, the victim can file a claim against the commercial establishment, private hosts, or alcohol retailer who served alcohol to the driver. In most cases, these potentially liable parties have adequate insurance coverage to compensate victims if the driver is uninsured or underinsured. 

Contact Salam & Associates for a Free Consultation

Regardless if an establishment or individual has liability insurance coverage, an experienced personal injury attorney can help you figure out if a dram shop violation contributed to your accident or a loved one’s death and advise you of your state’s dram shop liability laws. Our attorneys here at Salam & Associates are licensed to practice in various states, including Texas, Michigan, New Mexico, and D.C. Contact us online at www.salampc.com or [email protected] or call us at 866-640-8998 to schedule a free review or your case.


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