Hospitality Law: Dram Shop Insurance Essay

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Restaurants, hotels and other hospitality organizations have to take various precautions in order to safeguard themselves against possible risks. In this case, close attention should be paid to possible legal action. In particular, these should have workers’ compensation and dram shop insurance since they can reduce the likelihood of legal problems. First, one should mention dram shop insurance that covers the liabilities of businesses selling alcoholic beverages. The potential difficulties can occur provided that a restaurant sells alcohol to underage people or those clients who are already intoxicated. This tort can be the cause of legal action on behalf of third parties.

For instance, these organizations can face a lawsuit provided that their intoxicated clients cause injury or death of other people. Moreover, restaurants or hotels can be held accountable for the damage of property. In other words, hospitality institutions may have to reimburse numerous third parties.

Under such circumstances, the sustainability of a restaurant or hotel can be threatened. Therefore, the dram shop insurance is important because it helps a hospitality institution to minimize the risk of employees’ negligence, especially when they do not ask customers for identification before giving them alcoholic beverages. This is why dram show insurance is essential for such businesses which have a right to sell alcohol to the customers. This is one of the main aspects that can be identified.

Apart from that, one should remember about the role of workers’ compensation insurance which is also obligatory for various hospitality institutions. It should be mentioned that the employees of restaurants and hotels can also sustain their injuries in the workplace, even if this risk is lower in comparison with other industries. For instance, the managers of hospitality organizations should remember that people, working in kitchens or even bathrooms, can be exposed to potential dangers such as burn injuries which are very frequent. Overall, the risks of various injuries cannot be completely eliminated even if strict security rules are adopted.

This is why workers’ compensation insurance should cover the medical costs of an employee as well as wages that he/she did not receive because of illness or injury. These are the main requirements that should be met.

Such cases can be extremely widespread in various hospitality organizations. Again, this type of insurance can minimize the impact of negligence and help the company avoid lawsuits from employees. It should be taken into consideration that workers, who accept this type of insurance, have fewer opportunities for suing a restaurant or hotel in the future. This legal safeguard is a significant element of risk management strategies in many hospitality organizations that can hire a great number of employees who have different skills.

On the whole, these two types of insurance are important for complying with the legal norms adopted in various counties. Moreover, these legal safeguards can help restaurants or hotels minimize their potential losses which can occur as a result of negligence. This is why this issue should be overlooked by the owners of these enterprises. Certainly, one should not assume that these forms of insurance are the only ones that hospitality organizations should have. Yet, they are vital for their sustainability and ability to protect its interests in the court. These are the main issues that the owners of these companies should take into account.

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IvyPanda. (2022, April 8). Hospitality Law: Dram Shop Insurance. https://ivypanda.com/essays/hospitality-law-dram-shop-insurance/

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"Hospitality Law: Dram Shop Insurance." IvyPanda, 8 Apr. 2022, ivypanda.com/essays/hospitality-law-dram-shop-insurance/.

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IvyPanda. (2022) 'Hospitality Law: Dram Shop Insurance'. 8 April.

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IvyPanda. 2022. "Hospitality Law: Dram Shop Insurance." April 8, 2022. https://ivypanda.com/essays/hospitality-law-dram-shop-insurance/.

1. IvyPanda. "Hospitality Law: Dram Shop Insurance." April 8, 2022. https://ivypanda.com/essays/hospitality-law-dram-shop-insurance/.


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IvyPanda. "Hospitality Law: Dram Shop Insurance." April 8, 2022. https://ivypanda.com/essays/hospitality-law-dram-shop-insurance/.

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