Lake Minnetonka’s restaurants, bars, and event venues stay busy well after the boats come out of the water, with holiday parties filling calendars from Thanksgiving through New Year’s Eve. For any business that sells alcohol, that busy season is a good time to understand Minnesota’s Civil Damages Act, the state’s dram shop law.
What the Civil Damages Act Does
Under Minnesota Statute 340A.801, a person injured by an intoxicated individual can bring a claim directly against the licensed business that caused or contributed to that intoxication through an illegal sale. The intoxicated person generally can’t sue the business for their own injuries from voluntary drinking.
What Counts as an Illegal Sale
- Serving someone who is obviously intoxicated
- Serving anyone under 21
- Selling outside permitted hours or days
Key Rules Business Owners Should Know
- Insurance is required. Minnesota generally won’t issue or renew a retail liquor license unless the business shows proof of financial responsibility for this type of liability, usually through liquor liability insurance.
- Notice comes first. A claimant’s attorney must serve written notice on the licensee within 240 days of taking the case, or the claim generally can’t proceed.
- Lawsuits have a deadline. Claims are generally subject to a two-year limit from the date of injury.
- General liability isn’t enough. Most general liability policies exclude claims tied to selling alcohol, which is why liquor liability is a separate coverage.
Holiday Season Considerations
Private parties, catered events, and community festivals each raise their own questions. Temporary and festival licenses can carry insurance requirements too. Staff training on recognizing intoxication and checking IDs helps reduce risk, and incident logs can help if a claim comes up later.
Wiser Insurance Agency in Mound, MN can review your commercial insurance and liquor liability limits before the holiday rush. Policy wording varies, and a Minnesota attorney can help with specific claims. Businesses around Mound, MN and Lake Minnetonka can reach out to Wiser Insurance Agency, and browse our insurance blog for more business coverage topics.
