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From the Front Lines: Liquor Liability

Many smaller restaurants only serve a little bit of wine or beer—and therefore don't think they need liquor liability insurance. But "that doesn't exclude you from having a claim," says independent agent Melinda Langworthy. "I still recommend getting the liquor liability to protect from the what-ifs."
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MelindaLangworthyMelinda Langworthy

Senior Producer
General Liability Shop
Columbia, Missouri

How did you get started at your agency?

I’ve been in insurance for a total of eight years. I came from a brick-and-mortar agency in Colorado where producers went out and pounded the pavement for business. I was not afraid of that, but I had small children, so I was not in a position in my life where I had time for networking and after-hours types of things.

When my family and I moved in this direction four a half years ago, it was a really good opportunity, and I took it. When I was offered this job, I couldn’t believe I just sat at my desk all day and talked to people and took leads and dealt with everything online, via email or via phone. But customers are definitely moving toward email and phone. They find you on Facebook and LinkedIn.

Why focus on liquor liability?

My background is general liability and business owner’s policies, which a lot of times incorporate liquor liability. When you’re a brick-and-mortar agent, the best types of policies in my opinion are local restaurants and local retail stores, and obviously the restaurants are going to have the liquor liability.

When I moved over to The Insurance Shop, we primarily focus on workers compensation, and then we account-round with general liability, BOPs, liquor liability, employment practices liability—all those types of things. When I talk to a restaurant and they say, “Oh, we don’t need liquor liability”—a lot of these small restaurants might just serve a little bit of wine or a little bit of beer which doesn’t encompass the majority of their sales, but that doesn’t exclude you from having a claim. I still recommend getting the liquor liability to protect from the what-ifs.

Biggest challenges in liquor liability today?

In Columbia, if you’re going to sell liquor, they require you to have liquor liability insurance. I’ve had clients not be completely truthful with me about how much they sell or whether they’ve had any minor violations. And that’s a real quick way to never get liquor liability insurance again, or if you do, you’re paying a through-the-roof premium. Then I have to go back and say, “Your carrier is nonrenewing you, or even midterm nonrenewing you for that matter, because you had three violations and never told anybody.” There are markets that will take it in the excess & surplus lines space, so you can go that direction and get a different type of package policy, but at that point you’re paying a higher premium for your entire package.

As a client, you’re not only creating extra work for your agent, you’re also creating extra work for yourself as a business owner. Now you have to get another policy midterm, you have to put another down payment down, when on the front end, we could have just had an educational conversation about it. Let’s implement some safety techniques, let’s implement some bartender rules and regulations, and once your minor violations are behind you we can move you to a standard market policy with a lower premium. But you have to earn that trust back with those carriers.

I’ve had companies that haven’t had liquor liability or any type of liability for six months because they got nonrenewed, so here I am scrambling six months later trying to find another policy. And having a lapse in coverage is something that’s hard to deal with. It’s hard to deal with on the agent side, it’s hard to deal with on the carrier side and it’s hard to deal with on the business owner’s side. You’ve essentially been gambling against your blood, sweat and tears for the last six months. You’ve worked really hard to have this business of yours. You need to protect it every single day.

Advice for a fellow liquor liability agent?

I don’t like to just sell insurance. I like to help people understand why they need insurance, and not just because they have to have it. So many people misunderstand what a liability policy entails. On liquor liability with assault and battery, for example, your policy’s going to respond to medical and civil suits, but it’s also going to protect your business and your name in situations like when you have to remove somebody from your bar. Even if you have witnesses who say your bouncer or door person did everything the correct way, this angry patron may say, “I have this huge bruise on my arm.” Your policy’s going to respond to that for legal expenses. Yes, car accidents happen after overserving and they’re terrible and horrific, and so is a bar fight that results in stitches or a broken nose. But a lot of times it is the smaller things where your policy winds up responding and protecting your name and your reputation.

Favorite liquor liability success story?

Anytime somebody comes to me with a problem, whether they have a lapse in coverage or they’re paying too high of a premium, and I’m able to solve it for them, it’s a win. The biggest success, though, is when I have a new venture, when everything is fresh and I have the opportunity to really educate my clients and explain the policies and make sure all their coverages are in place. Those are my favorite wins—when I can come in and not just offer a product or service, but also say, “Hey, a year from now, five years from now, you want to make sure you’re maintaining this policy by educating your bartenders and your servers on the front end and understanding how your policy is going to work.”

Jacquelyn Connelly is IA senior editor.

Sunday, August 2, 2020
Liquor Liability