Most businesses carry general liability insurance, particularly if they invite customers on site to do business. That’s because under Maine statutes, a person who is invited onto the property for the financial benefit of the property owner is owed the highest duty of care and has the right to expect they will be reasonably safe. General liability insurance typically covers businesses from liability lawsuits stemming from claims like slip-and-fall injuries, falling merchandise, or some other dangerous condition.
However, those establishments that sell alcohol and invite patrons to drink on site should consider additional coverage because there are claims unique to these entities. For example, some bars and restaurants face the possibility of dram shop liability, in which those injured by a drunk driver can sue the bar where workers served that driver alcohol. Another possibility is that of third-party liability for criminal assault. Of course, there is a potential for this kind of action in many different business settings, but especially so at a bar where patrons’ inhibitions may be lowered, making some more aggressive and others more vulnerable.
In a recent Maine Supreme Judicial Court case, the question is whether an insurance company should have to indemnify the business for injuries sustained by a man who was beaten by a fellow patron at the bar. The claim by the bar against the insurer doesn’t have a direct bearing on the injury lawsuit filed by the patron, except that by making the bar directly liable rather than the insurer, there is a risk the bar won’t be able to pay out the full damages, depending on how much those damages are and the health of the business.
In the recent case, the patron alleged third-party premises liability against the bar, seeking compensatory damages, after he was violently attacked by a group of other patrons while he was an invitee and customer of the bar. He alleged the bar was responsible to cover the cost of his injuries for two reasons:
- While the bar had a general and specific notice to patrons that the risk of assault may be imminent, the duty of care was breached when the bar staff refused to prevent or interfere with the assault in failing to call police or otherwise intervening to protect him.
- The bar staff created a dangerous condition by ejecting both him and the other patrons at the same time in the same parking lot, knowing there was an ongoing dispute.
The bar did have an insurance policy from the defendant insurer, which included both commercial general liability and liquor liability coverage. However, there was a provision in both policies that indicated there were exclusions for assault and battery claims.
The bar owner asked the insurer to defend it in the premises liability case, but the insurer declined, pointing to the assault and battery exclusions. The bar then sued the insurer, seeking a declaratory judgment asserting duty to defend and breach of contract. The insurer filed a cross-motion for summary judgment, which the trial court granted.
The bar appealed, but the Maine Supreme Judicial Court affirmed. The only question was whether the insurer had a duty to defend as a matter of law. This means looking at whether the insurer is contractually obligated to defend an insured in an underlying lawsuit. The court held that the exclusions listed clearly and unambiguously upheld the insurer’s stance.
That means the bar will be on its own in footing the bill for the cost of the personal injury lawsuit.
Call Peter Thompson & Associates at 1-800-490-5218 for a confidential consultation to discuss your rights.
Barnie’s Bar & Grill, Inc. v. U.S. Liability Insurance Co., Dec. 20, 2017, Maine Supreme Judicial Court
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