Navigating Montana’s Tavern Insurance Industry

Written by Holly Hovland—Commercial Insurance Advisor

April 15, 2024

Blog Navigating Montana’s Tavern Insurance Industry

2023 brought big changes to Montana’s tavern insurance industry:

  • Several liquor liability insurance providers stopped covering Montana businesses.
  • Insurance companies started becoming stricter about risks they will cover.
  • Rates increased.
  • Senate Bill 107 was passed in Montana, revising liquor liability laws for injuries involving alcohol overconsumption.

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Implications of Montana’s Senate Bill (SB) 107

In the Montana 2023 legislative session, dram shop laws were changed to prevent frivolous lawsuits and civil liability for establishment owners, protecting them against being named in a lawsuit for the sole purpose that they furnish alcoholic beverages. These claims were naming every single location where a person had consumed alcohol prior to either causing an accident or hurting someone. This resulted in millions of dollars in claims for insurance companies.

SB 107 is the light at the end of the tunnel — but it’s a long tunnel. Prior to SB 107 being passed, some insurance companies had already started their exit from the Montana market in 2024 by filing their forms with the state insurance commissioner. This left many Montana liquor establishments either uninsured or with huge rate increases. Going forward, insurance companies will need to recognize they have less risk in Montana, file rates with the state, have them approved, and enter (or reenter) the liquor liability market.

Navigating the Impact of Montana's Senate Bill (SB) 107 on Liquor Liability

Thankfully, we have solutions for now and the future. Here’s how Leavitt Great West Insurance can help:

  • We have access to carriers that are still writing liquor liability.
  • We will leverage our excellent relationships with these carriers to solve your uninsured/underinsured woes.
  • We are a preferred agency of the Montana Tavern Association (MTA).

The market is narrow! BUT I have dedicated the last year to finding every market possible for liquor liability, and I have solutions for establishment owners. My team and I have this market down to a science. We know exactly what markets will take each type of liquor risk. While the premium may not be desirable in all cases, we can help ensure liquor establishments don’t go without coverage.

Maximizing Liquor Liability Protection: Tips for Montana Establishments

Here are some simple tips and tricks to better qualify your business for affordable markets in liquor liability.

Celebrate happy hour wisely. Host happy hours for only one to two hours, ending by 9:00 p.m. Offer happy hour drinks at a reduced price per drink rather than “buy one, get one free.”

Adhere to “last call” rules. Last call should be prior to 2:00 a.m. Allow only one drink per person at last call.

Add variety to your menu. Food sales help! Offering air fryer food, frozen pizzas, and snacks as part of your menu can help reduce your premium.

Limit liability exposure. Consider measures such as limiting the hours of alcohol service, implementing drink limits, or offering designated driver programs to reduce the risk of accidents related to alcohol consumption.

Invest in security measures. Install security cameras, fire and burglar alarm systems, and adequate lighting to deter criminal activity. Camera systems should save recordings for at least 30 days. A secure establishment is viewed more favorably by insurance providers.

Maintain proper documentation. Keep accurate records of all safety measures, transactions, and incidents (including if the police were called and how de-escalation occurred). This documentation can be crucial in case of an insurance claim or legal dispute.

Provide comprehensive employee training. This should include ID-checking procedures that are documented and taught to your employees at least once per year. Thoroughly train your employees on responsible alcohol service and conflict resolution techniques. Ensure all employees who serve have TIPS training certificates. Well-trained employees can mitigate risks and reduce liability.

Keep a clean safety record. Insurance companies often reward businesses with a clean safety record. Implement rigorous safety protocols to minimize the risk of accidents or incidents on your premises.

Stay in compliance. Ensure strict adherence to all local, state, and federal regulations governing liquor sales, food safety, fire safety, and building codes. Compliance demonstrates your commitment to operating a responsible establishment, which can positively impact insurance rates.

Demonstrate financial stability. Insurance companies may offer lower rates to businesses with a strong financial history. Maintain good credit and financial stability to improve your chances of securing affordable insurance rates.

By implementing these strategies, you can effectively reduce liquor liability insurance rates while safeguarding your Montana business against potential risks and liabilities.