Or. Admin. R. 845-005-0400 - Liquor Liability Insurance or Bond Requirement
Certain licensees are required to maintain liquor liability insurance or a bond. Failure to maintain the required liquor liability insurance or bond constitutes a serious threat to public health and safety. This rule explains the liquor liability insurance or bond requirement and sanctions.
(1) Requirement. The
Commission will refuse to license any applicant, may cancel or suspend the
license of any licensee, and may sanction any licensee that is subject to the
requirements of this rule and fails to:
(a)
Maintain liquor liability insurance of not less than $300,000; or
(b) Maintain a liquor liability bond with a
corporate surety authorized to transact business in this state in the amount of
not less than $300,000.
(c)
Designate and maintain the Commission as a certificate holder.
(2) Applicability. This rule
applies to the following license types:
(a)
Full on-premises sales license;
(b)
Limited on-premises sales license;
(c) Brewery-public house license;
(d) Temporary sales license, special events
winery license, special events grower sales privilege license, special events
brewery-public house license, and special events distillery licenses if the
licensed event is open to the public and attendance at the event is anticipated
to exceed 300 individuals per day; and
(e) Winery license, brewery license and
grower sales privilege license unless the applicant or licensee submits an
affidavit stating consumption of alcoholic beverages will not occur on the
licensed premises.
(3)
Providing Proof of Insurance or Bond at Licensing. An applicant for a license
listed in subsection (2) must provide to the Commission proof of insurance or
bond prior to licensing.
(a) Proof of
Insurance. The applicant must provide to the Commission a certificate of
insurance that shows applicant as the named insured, the premises address,
liquor liability insurance coverage in the amount of at least $300,000, that
coverage is current, and lists the Commission as a certificate
holder.
(b) Proof of Bond. The
applicant must provide to the Commission the corporate surety with a valid bond
identification number.
(4) Providing Proof of Insurance or Bond at
License Renewal. An applicant for the renewal of a license listed in subsection
(2) must provide to the Commission proof of insurance or bond prior to the
Commission renewing the license.
(a) Proof of
Insurance. The applicant must provide to the Commission the name of the
insurance company and the insurance policy number. Notwithstanding this
requirement, the Commission may require the applicant to provide proof of
insurance as per subsection (3)(a) of this rule.
(b) Proof of Bond. The applicant must provide
to the Commission the corporate surety and a valid bond identification
number.
(5) Providing
Proof of Insurance or Bond Other Than at Licensing or License Renewal.
(a) The licensee must maintain valid and
current proof of insurance or bond at the licensed premises and:
(A) Post the proof of insurance or bond in
full public view; or
(B) Make the
proof of insurance or bond available at any time for immediate inspection by
any Commission employee.
(b) Proof of insurance. The applicant must
provide to the Commission a certificate of insurance that shows licensee as the
named insured, the premises address, liquor liability insurance coverage in the
amount of at least $300,000, that coverage is current, and lists the Commission
as a certificate holder.
(c) Proof
of bond. The applicant must provide to the Commission the corporate surety and
a valid bond identification number.
(d) Failure to post or provide proof of
insurance or bond as required in this section is a Category V violation, and if
the licensee also has a lapse in insurance or bond coverage, the Commission may
assess a separate sanction as per subsection (7) of this rule.
(6) Immediate Suspension. If a
licensee fails to provide to the Commission proof of insurance or bond the
Commission may immediately suspend the license pursuant to ORS
471.168. The Commission may
rescind the Order of Immediate Suspension once the Commission determines that
the licensee has provided proof of valid and current insurance or bond as per
subsection (5)(b)(c) and (7)(c) of this rule.
(7) Failure to maintain insurance or bond as
required is a violation. The sanction for the first lapse in coverage within a
two year period is as follows:
(a) If the
lapse in coverage is no more than 30 days the sanction is $1,650 or a 10 day
license suspension.
(b) If the
lapse of coverage is 31 days to no more than 60 days the sanction is $4,950 or
a 30 day license suspension.
(c) If
the lapse of coverage is 61 days to no more than 90 days the sanction is $4,950
and a 90 day license suspension. In addition, the licensee must provide to the
Commission proof of premium payment for at least a 12-month period for the
statutory minimum insurance and/or bond limits set forth in ORS
471.168.
(8) The sanction for any lapse in coverage
not described in section (7) is cancellation of the license.
(9) Aggravating or mitigating circumstances.
In addition to the Commission's other aggravating and mitigating circumstances,
when the Commission discovers a lapse in coverage, the Commission may mitigate
the sanction if the Commission determines that the cause for failure to
maintain liquor liability insurance or bond as per subsection (1) of this rule
was beyond the reasonable control of the licensee. One method for showing the
cause for failure to maintain liquor liability insurance or bond was beyond the
reasonable control of the licensee is for the Commission to determine that the
licensee has provided sufficient proof to the Commission that the licensee has
continued to pay for coverage during the period of the lapse.
(10) Cessation of Coverage. A licensee may
elect not to maintain liquor liability insurance or bond coverage, but only if
the licensee will cease the sale and service of alcohol and prohibit the
consumption of alcoholic beverages on the licensed premises for at least 90
contiguous days and the licensee provides the Commission with prior written
notice of the start and end date of the cessation of the sale and service of
alcohol. Failure to notify the Commission is a Category IV violation and is in
addition to separate violations that may be charged for operating without
coverage.
Notes
Statutory/Other Authority: ORS 183.430, 471, 471.030, 471.040, 471.168, 471.313, 471.315, 471.730(1) & (5)
Statutes/Other Implemented: ORS 471.168(5), 471.313(2) & 471.315(1)(a)(C)
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