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Should Bars Be Required to Carry Liquor Liability Insurance in Texas – Meet HB 409

There are many considerations to be made when it comes to bars and bar owners. Those that serve alcohol as part of a business must consider state and local laws surrounding what can be sold, to whom it can be sold, and other important considerations that should be taken into account. More recently, according to the Food & Beverage Agency, proposal of House Bill 409 has come into light, which would require Texas bars and restaurants that have more than 50% of their revenue from alcohol, to carry liquor liability insurance.

In addition, as noted by House Bill 409 itself, it would be required that:

  • The person may not hold a permit allowing them to serve alcoholic beverages for on-premises consumption unless the person maintains liability insurance.
  • The insurance must be issued by an insurance company authorized to write liability insurance in this state or an eligible surplus lines issues.
  • In addition, the insurance that is obtained must pay, on behalf of the permit holder or a person who sells or serves alcoholic beverages under the authority of the permit holder’s permit, amounts the permit holder or person becomes obligated to pay as damages arising out of the sale or service of alcoholic beverages.

According to Joe Thomas, an account representative of Food & Beverage Insurance Agency, “Every moment a bar or restaurant goes without liquor liability coverage is a moment where they’re risking everything, putting their entire business on the line.”

Furthermore, Mr. Thomas goes on to state that, “Accidents can happen at any time without warning, and it’s important for all parties involved that the business have proper liquor liability insurance in order to take responsibility and also to protect itself.”

The proposed bill would be a part of the updated Dram Shop laws, which not only affect bars and restaurant owners, but also bar patrons as well. According to World Now, there are many different ways that the proposed bill may affect patrons, including:

  • New liquor laws may increase the need to restrict underage individuals from even entering the bar. Currently, many bars allow those under 21 to enter the bar, but not partake. With the new law it may be likely that this restriction will see an end to this practice.
  • Bars may become stricter on how many drinks are served in order to prevent over serving customers.
  • There is the potential that customers will help subsidize the cost of compliance with the new law by paying higher prices for drinks. To this extent, because the bar and restaurant owners will need to pay additionally for insurance.


Although these consequences are speculative at best, they still may prove to be a reality with the passing of the bill. With the new restrictions imposed on bars and restaurants that primarily sell alcohol it would stand to reason that these facilities will also react as such. However, even if these measures are seen, it would equally ensure that bars are extra vigilant with keeping patrons safe. We support this bill.

Source: http://www.wdrb.com/story/29040871/what-a-proposed-new-texas-dram-shop-law-would-mean-for-bar-owners-and-bar-patrons

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