With Spring Break right around the corner, now is an excellent time to review your lodging property’s alcoholic beverage service policies to ensure compliance with Texas law.

Remember, Texas law requires sellers and servers of alcoholic beverages to refuse beverage service to both minors and intoxicated persons. Failure to do so could lead to both criminal and civil penalties, including lawsuits and/or the suspension of the property’s alcoholic beverage license. 

This concept is often referred to a “Dram Shop” liability, and it means businesses and alcohol providers could be held liable for the actions of those they have served alcohol to negligently, recklessly, or illegally.

Take action now to reduce this liability by reviewing this checklist:

Put alcohol service policies in place
It is important to have an official policy in place for the serving of alcoholic beverages to your patrons. This policy should enforce the regulations set forth by the Texas Alcohol Beverage Commission (TABC), as well as any in-house rules your establishment has for the service of alcoholic beverages.

For good measure, you should have your servers sign a copy of your policy, showing that they are aware and understand what your expectations are of them.  

Likewise, it is advisable to post a copy of your rules in a location that allows your servers to see and understand the rules of your facility (such as next to a time-clock). Managers should re-emphasize these rules along with recognizing the signs of intoxication (see below) with sellers and servers at every staff meeting, and at least weekly.

Get your sellers and servers TABC-certified by participating in a training class
Seller training is a certification process designed to educate sellers and servers on how to provide alcoholic beverages in a safer manner.  

Topics include teaching sellers and servers how to avoid selling alcohol to minors and intoxicated persons. Ensuring that all servers are certified confers an important advantage: if procedures are administered correctly, the TABC will not take administrative action against the establishment if the certified employee sells or serves alcoholic beverages to a minor or intoxicated person.  

This is known as “safe harbor,” and will protect the employer from a TABC fine or license suspension if the employer requires its employees to participate in a Commission-approved seller training program; the employee has actually completed such a training program; and the employer has not directly or indirectly encouraged the employee to violate such law.

While TABC seller/server certification is an important part of mitigating risk, the safe harbor afforded by the program will not protect a lodging property from a private lawsuit.  

The certification program should be combined with regular seller on-the-job meetings and training, procedures for handling the service of alcohol responsibly, and management oversight.

Recognize the signs of intoxication
A retailer, seller, or server may not sell or serve alcoholic beverages to an intoxicated person.  Signs of intoxication include slurred speech, mental confusion, impaired balance, impaired motor ability, bloodshot eyes, dishevelment, the smell of alcohol, and signs of past or present incontinence or nausea.

Steps to responsible alcohol beverage service:

• Do NOT serve alcohol to minors and/or intoxicated persons
• Do NOT serve someone to the point of intoxication
• Do NOT allow employees to drink alcoholic beverages while working
• Be sure to check photo identification of anyone who appears to be under 30 years of age
• Provide alternative transportation to intoxicated patrons
• Develop a method for evaluating quantity of a group or individual, and establish a drinks-per-person per hour (DPPPH) number
• Inform law enforcement authorities when intervention attempts with minors or intoxicated persons fail

Understand restrictions and guidelines on promotions that may encourage excessive consumption
TABC rules specifically prohibit businesses from engaging in promotions that encourage excessive consumption, and the selling or serving of more than two drinks to a single consumer at a time.  

Drink specials should not include shots, multiple liquors, or specialty drinks containing excessive alcohol.  Also, remember that an establishment may not sell or offer “all you can drink” specials.  Instead, it is also a good practice to incorporate menus and specials for food and non-alcoholic beverages.

Purchase a liability insurance policy that covers alcoholic beverage service
General liability policies typically do not cover injuries or damages related to the consumption or distribution of alcoholic beverages.  

It is important to acquire liquor liability insurance covering bodily injury or property damage that occur from the direct or indirect intoxication of a person, serving an already intoxicated person, providing alcohol to a minor, or violation of regulations relating to the distribution of alcohol.  Contact THLA for a list of insurance providers we work with who offer this coverage.

For more information, feel free to contact the THLA legal staff by calling 512.474.2996 or emailing news@texaslodging.com.