Vt. bar owners seek ‘dram shop law’ reform

Published: Mar. 10, 2023 at 4:03 PM EST
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KILLINGTON, Vt. (WCAX) - Some Vermont bars and nightclubs say they’re hitting roadblocks when it comes to renewing their liability insurance, and that in some cases, it could put them out of business. Now, they’re asking state lawmakers to step in.

Skiiers in Killington were out Friday taking advantage of springlike conditions. And when the sun sets, many will hit the access road and grab a drink and live music at places like the Pickle Barrell.

“When I first got into this business, it was about drinking and dancing and having fun. Now, it’s more about entertainment,” said Chris Karr, who has owned the popular nightclub for over 20 years.

But he has a problem. He needs to renew his liability insurance policy but neither his current insurer nor others he’s reached out to will even sell policies in Vermont. “Flat out -- I will not operate without that coverage. It’s like driving a car without car insurance -- you wouldn’t think of it,” Karr said.

Vermont’s rules for commercial establishments that sell alcoholic beverages, or “dram shop laws,” haven’t been updated since the 1980s, and liability insurance is not required by law. Insurance companies rank Vermont as the second riskiest state -- after Alabama -- to cover bars and nightclubs. The state’s dram shop laws establish a strict chain of liability from the bartender all the way to the landlord. Plus, the insurance market nationally is hardening and companies are taking on less risk.

“So, Vermont having the strictest liability possible -- it’s a risk that insurers are not willing to take,” said Amy Spear with the Vermont Chamber of Commerce.

Vermont lawmakers are now looking to make a switch from a “negligence standard” to a “strict liability standard” so that Karr and others don’t have to shutter their doors.

Top lawmakers say it’s a fine balance between giving bars protections but also making sure that those harmed can seek damages. “We are balancing the consumer protection aspect, the incentivizing behavior in these establishments, with keeping the establishments open,” explained Rep. Martin LaLonde, D-South Burlington

The Vermont Department of Liquor and Lottery is also keeping an eye on the situation. “We want to be as helpful as possible to the industry. We don’t want to obstruct this process but we really want to fulfill the public safety mandate,” said the department’s Charles Martin.

But with so many factors in the insurance marketplace out of the state’s control, Rep. LaLonde says it’s unclear what a change to the dram shop laws will have on insurance rates, if any. “My biggest question -- is that going to make a big enough of a difference? That’s where the uncertainty is,” he said.

Lawmakers are also running into time constraints. Next week is crossover day, the halfway point in the session where each chamber swaps bills. Any proposal would have to be voted out of the committee before then.