Alcohol Licensing in Texas

Understanding complex insurance requirements and state regulation requirements for events at which alcohol will be served are challenging. Certification, alcohol licensing, party host coverage, and liability coverage are interrelated but different terms. It’s important to understand the insurance aspects and state regulations regarding alcohol service.

The Texas Alcohol & Beverage Commission is the state regulatory agency that collects taxes on alcohol sales and upholds regulations and training requirements that pertain to sales and service of alcohol. It’s important to understand the TABC’s dual role as it relates to an establishment or party’s TABC license TABC license .

TABC Certification

Texas law doesn’t technically require alcohol servers or bartenders to have a TABC   “seller-server” certification . Licensed entities and establishments must have TABC certification. Although the certification doesn’t provide umbrella indemnity to the establishment, host or company in a civil suit that arises from damages caused by an accident that’s caused by alcohol, the decision to hire certified staff can help to demonstrate due diligence to extricate or lessen liability.

TABC also regulates the sales and resales of alcohol in Texas and offers seller-server training. A licensed entity seeking to buy liquor from a distributor with the intention to resell the liquor must make an application and become approved for a liquor license by TABC. There are several types of licenses issued by TABC.

TABC Costs

Licensed entities pay an annual flat fee plus a tax on each bottle of alcohol purchased. Each bottle bears a label that includes the name of the licensed purchaser or owner. When a bottle is emptied, the labels are destroyed to prevent reuse.

Licensing by TABC isn’t transferable from an entity to a third party. Only a licensed entity can sell or resell alcohol. For instance, Texas law says that a broker can’t donate alcohol to a charitable organization. Some organizational entities attempt to skirt this facet of the law by allowing a licensed entity to buy alcohol from a distributor or broker who donated it. By attempting to pay the organization for the purchase from the distributor or broker, it makes reimbursement in a faulty circumnavigation of payments.

If such a ruse is identified in a civil case or via as post-event insurance claim, the parties involved bear significant liability. For instance, if alcohol is to be sold at a cash bar, the entity much seek licensure for the place at which the alcohol is served and a temporary permit for the day and place at which it will be sold. TABC must approve the request before the event. The temporary permit process takes approximately three to five days.

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