Punch-drunk insurance: Ontario’s alcohol deregulation and evolving liability

Punch-drunk insurance: Ontario’s alcohol deregulation and evolving liability

Punch-drunk insurance: Ontario’s alcohol deregulation and evolving liability In what Premier Kathleen Wynne called “the biggest shake up to the sale of beer in Ontario since we repealed prohibition in this province and that was in 1927,” the provincial government will now allow beer to be sold in 450 retail locations, including supermarkets, reports The Toronto Sun.
 
While the move has its critics, many consumers are embracing the change because of its convenience, while business owners look forward to a new line of revenue stream.
 
With any hospitality expansion, however, comes significant risk. Unlike bars and nightclubs, patrons will not be consuming the product on premise – but supermarkets and convenience stores come with their own form of liabilities.
 
“For me, the big exposure is the practice of selling,” said Kent Pitkin, national director, commercial lines at April Canada. “When you go to the grocery store, who’s usually standing at the cash register? Oftentimes it’s a teenage kid. Are they always going to ID properly, can they tell if someone is inebriated and will they be able to resist letting their underage buddies slip through?”
 
Pitkin foresees instances where alcohol that is sold negligently would cause the store to be held liable or damages, which “could drive premiums up and grow their claims.”
 
“In Ontario, we’re becoming so litigious that if somebody sells a six pack of beer to a minor and that minor gets in a car accident, someone will be suing that grocery store in a heartbeat,” he said.
 
In addition, the deregulation of alcohol could create a tangential risk in the form of increased number of thefts. Since grocery stores are generally more open and accessible than liquor stores, burglars may have a greater opportunity to steal alcohol products.
 
“When I pass the liquor store near my house, as soon as the place shuts down, it’s fully alarmed, gates come down and it’s really protected,” Pitkin said. “But a lot of grocery stores are open 24 hours a day, so the potential for the theft of alcohol will probably increase.”
 
It’s unclear how brokers can market additional coverage to these businesses since the government has not yet revealed the manner in which alcohol will be sold stores. Still, given the rise of lawsuits in Ontario, legal expense insurance might be a good place to start.
 
“Hospitality accounts are taking that up more as Ontario becomes more litigious,” Pitkin said. “Once they understand the coverage and see the benefits from it, they usually realize the cost-benefit analysis works in favor of purchasing it.”