Under Iowa’s current antiquated system, only hospitality operators are required to insure themselves against the behavior of others. This mandated insurance is often cost-prohibitive, providing little coverage to the business or assistance to innocent victims.
Des Moines – January 22, 2018 – The Iowa Restaurant Association is asking state lawmakers to pass insurance reform that would make it possible for restaurant and tavern operators to secure better policies to help compensate innocent victims if an intoxicated person causes harm and the restaurant or bar is held partially responsible.
Called “DRAM” insurance, in Iowa this coverage requirement is unique to those who “sell and serve” alcohol such as restaurants and bars. There is no similar requirement for those who “sell” unopened alcohol such as box stores, pharmacies, grocery, and convenience stores.
“We are the only segment of the industry which is held responsible for the behavior of others,” said Jessica Dunker, president and CEO of the Iowa Restaurant Association, the group spearheading the proposed changes. “We understand we have a unique relationship with patrons and as such we’re willing to carry the extra coverage, but we also have to have access to affordable policies.”
According to Dunker, Iowa ranks 46th in the nation in “insurability” for DRAM. “That’s a pretty unattractive marketplace,” says Dunker. She points to the rankings from ISO, an organization that provides actuarial and other information about property/casualty insurance risk. This data is used by insurance carriers to select markets and set rates.
“The way Iowa’s laws are written today, it’s nearly impossible for them to determine their risk,” says Dunker. “If I was an insurance carrier, I’d think twice about writing DRAM policies in Iowa too.”
As a result, Iowa restaurants and bars can often find only one carrier willing to offer the insurance, resulting in high-cost, low-coverage policies. “I know of one operator who has a $150,000 policy that he pays $40,000 per year for,” said Dunker. “This is particularly tough for border businesses who simply can’t compete with their counterparts in other states.”
The Association hopes their proposed changes will bring Iowa’s DRAM insurance grade in line with surrounding states. “Nearly anything would be better than what we have today,” said Dunker.
The Iowa Restaurant Association will be meeting with legislators this week to discuss their proposed changes. A copy of their proposed bill can be found here.
Iowa Restaurant Association
The Iowa Restaurant Association provides advocacy, education and promotional support to Iowa’s restaurant and tavern industry. www.restaurantiowa.com
Public Relations Specialist