Liquor Commissions to Conduct Dram Shop Reform Public Hearings

Des Moines, Iowa (April 28, 2003) – Dram Shop Reform will be the subject of a series of public forums held throughout Iowa this spring and summer. The Iowa Alcoholic Beverages Commission has scheduled four public meetings to examine and review Iowa’s dram shop law.

“The Commission, in concert with the Iowa Hospitality Association, the Iowa Insurance Industry, bar owners and the public, will examine the current state of dram in Iowa and will explore ways to improve the existing system,” explained Iowa Alcoholic Beverage Division’s Administrator Lynn Walding. “Reform, not repeal, will be the focus of the review. In that vein, the ultimate objective will be to reduce the incidents of dram claims and, thereby, reduce insurance premiums for bar owners.”

Dram has been the subject of several Commission meetings in recent months as the Commission sought to amend the dram administrative rule to increase the minimum dram coverage. The Iowa Alcoholic Beverages Commission, on March 6, 2002, approved the first major change in the dram shop coverage in over three decades.

Iowa, like a slight majority of other states, has a dram statute holding on-premises licensed establishments that serve intoxicated patrons responsible for any resulting injury or harm. The amount of minimum coverage is determined by Division rule.

The current rate requires bars to carry a minimum bodily injury or death coverage of $10,000 per individual ($20,000 cumulative) and $5,000 for loss of support. Starting September 1, 2003, licensees will be required to expand their minimum coverage upon license renewal. The new minimum levels for bodily injury or death will be $50,000 per individual ($100,000 cumulative) and $25,000 per individual ($50,000 cumulative) for loss of support.

While the new rates may result in increased premiums for some licensees, no comments were received throughout the rulemaking process in opposition to increasing the minimum coverage. “What the Commission did hear, however, was ample concern about the validity of some dram claims, dissatisfaction with dram protection and frustration with the high cost of dram,” noted Walding. “Some of the concerns appeared to be warranted, while others were merely based on misunderstanding or misinformation.”

The Commission will be holding public hearings throughout the state to educate licensees, consult with the insurance industry and search for methods to reduce the cost of dram, all while continuing to provide the public with the necessary protection. The first public meeting will be held at the Division’s Ankeny facility on April 30th. Additional sessions are set for Cedar Rapids (May 29), Council Bluffs (July 17) and Davenport (August 12).