What Does Your Insurance Really Cover?
by Jim Linnan, ESRTA Counsel

I previously wrote about the issue of your insurance not covering you if there is an altercation in your premises and one of your employees became involved. I received several calls concerning this issue, so I am doing a follow up on that topic.

If you are sued or receive a claim letter alleging that someone was injured in your premises as a result of an altercation, you should immediately turn that document over to your liability insurance carrier and your liquor liability (dram shop) insurance carrier. Prompt notice of a claim is very important. If you buy all of your insurance from one agent, it is usually best to submit the claim through your agent and let the agent notify the various insurance carriers. DO NOT, under any circumstances, attempt to explain the situation, either in person or on the telephone, to the representative of the injured party. Remember, anything you say can and will be used against you in Court.

If you receive a letter from your insurance company, which tells you that they will provide a defense, in the form of an attorney who will represent you, in the claim; but, that they are reserving their rights not to pay the claim under certain circumstances, you should be wary. This is called a Reservation of Rights Letter. If you, as an insured, receive a Reservation of Rights Letter, you have an absolute right to have a say in the picking of the attorney who will represent you at the insurance company’s expense.

Once again, it is always a good idea to make notes, including the names, addresses and phone numbers of potential witnesses, and the exact time and date of events if there is an altercation in your premises, so that you can locate the witnesses and have them interviewed by your representative should a claim arise. Most importantly, remind your employees regularly that they cannot, and must not, use any physical force, especially a punch or a push, on any patron.