In today’s hospitality landscape, liquor liability risk is no longer confined to over-service or slip-and-fall incidents.
Underwriters are contending with a volatile mix of local politics and increasingly mobile business models, while nuclear verdicts drive up loss severity. According to CRC Group, nearly 90% of carriers raised liquor liability rates in 2023, a response to the mounting pressure of courtroom unpredictability and rising claim costs.
Dan Smyrl (pictured), president at Admiral Insurance Group, a Berkley Company, doesn’t believe in chasing clarity through generalizations. Instead, he leans into the complexity.
“When we look in addition to individual characteristics of an insured,” Smyrl said, “the underwriters should really consider other things, like the venue, the state, even the county level, to determine how complicated the litigation environment could be.”
Liquor liability isn't shaped solely by policy language or past losses. The legal and cultural contexts of each jurisdiction, the reputation of a venue, even the kinds of nights it hosts, all influence how claims play out. Smyrl recalled instances where something as seemingly superficial as the name of a bar or its weekend lineup colored jury perceptions.
“We've seen cases where, based on even the name of the bar or activities that a bar has, it gives a reputation for heavy drinking, and in some cases, that has impacted how a jury would react,” he said.
What once felt peripheral—customer demographics, online reviews, social media presence—is now central to risk assessment. The music a bar plays or the crowd it draws on a Saturday night can say more about exposure than its square footage or hours of operation.
“There’s a lot of places we’ve learned over the years where it’s a restaurant during the day, but at nighttime it’s a nightclub,” Smyrl said. This exposes carriers to risks not immediately visible in an application form.
Local events or festivals that can turn a sleepy town into a flashpoint overnight. Even with data and diligence, some exposures emerge from seemingly nowhere.
“There are things that you can find out again, using social media but it’s that perfect example of lots of variables, and it’s really tough to get them all,” Smyrl said.
That unpredictability only increases when the business model breaks from the traditional four-walled establishment. Pop-up events, breweries operating out of trucks, and mobile bartenders are reshaping the industry—and in doing so, stretching the boundaries of what “liquor liability” even means.
“Anytime you have operations that are outside of a controlled environment, like [the] premises, it definitely opens you up to a lot more uncertainty,” Smyrl said. In these cases, surplus lines carriers have become essential, offering the flexibility to tailor exclusions to highly specific operations.
Even when alcohol isn't the root cause, the claims environment remains volatile. A perfectly compliant bar can still be exposed to assault and battery claims if an altercation breaks out, or trip hazards if the layout includes uneven flooring.
“You could have all the serving policies proper, but you wind up having a location that has a significant number of steps or uneven surfaces,” Smyrl said. These details may feel architectural or incidental, but in court, they can shape outcomes just as much as over-service does.
As hospitality evolves, the industry’s creative streak brings more than new menus and drink specials—it brings legal gray zones. Smyrl has seen it first-hand. “We are seeing more and more things. People have a lot of creative ideas.”
That creativity is where surplus lines carriers step in again, not just insuring risk but defining its boundaries. The challenge is writing coverage that protects while still drawing firm enough lines to avoid becoming a catch-all for unforeseen liabilities.
Meanwhile, the legal landscape doesn’t sit still. Shifts in state or municipal policy can quietly rewrite exposure overnight. Smyrl believes that staying ahead of those changes isn’t optional.
“Some days we find out a state is going in the direction [of] helping the insurance carriers,” he said. “And then there’s other states where all of a sudden they change, and now you're open to a much more potential claim.”
In that kind of volatility, even best-in-class underwriting practices may not be enough.
“You could wind up writing the best account based on having the right procedures,” Smyrl said, “but if they're in too difficult [of] a venue and something happens, you're more than likely going to be faced with a claim that's going to be on the higher end.”
Some challenges defy even the most careful pricing models. For example, legal restrictions on how staff can handle intoxicated patrons, especially in nightlife venues where physical removal can itself become grounds for a lawsuit.
What emerges from Smyrl’s perspective is an industry stretched across too many variables for shortcuts. “It’s never one thing,” Smyrl said. “It’s that compilation of so many different things that you have to look at to really make sure you understand what you have.”
