Michael’s Law – Requiring Liquor Liability Insurance in GA

On the night of August 28 at a Statesboro bar called Rude Rudy’s, the life of Michael Gatto, an 18-year-old Georgia Southern freshman from Forsyth County, was allegedly taken by the hands of Grant James Spencer. Spencer, an off-duty Rude Rudy’s bouncer and a 20-year-old Georgia Southern junior, has been accused of repeatedly beating Gatto in the head and causing his death from skull fractures and other head injuries. Spencer has been changed with felony murder and aggravated battery and is being held without bond.

Since the death of Gatto, the owner of Rude Rudy’s, Jonathan Earl Starkey, has permanently closed the bar, as per a voluntary agreement with the City of Statesboro. The agreement also stated that Starkey would surrender his alcohol license and forfeit his rights to obtain another license from the City of Statesboro.

The death caused the City of Statesboro to increase the occurrences of alcohol compliance checks, including checks for underage drinking, and the number of hearings held on alcohol license compliance issues. The City was already in the process of revamping the alcohol codes for the City, but the process has been extended since Gatto’s death. There has also been discussion locally about better training and education for employees that work in businesses that serve alcohol.

Gatto’s death may also have an impact for all Georgia businesses that serve alcohol. When Gatto’s parents contacted Starkey about helping cover the costs for over $150,000 in medical and funeral bills, they found out that they had very little recourse. The bar had closed and the State of Georgia did not have a requirement for businesses serving alcohol to have liquor liability insurance.

Rep. Mike Dudgeon (R-25, Johns Creek) wants to change Georgia law to require the insurance. Dudgeon has been working on a bill for the upcoming session entitled Michael’s Law that would add Georgia to the list of 15 other states that require the insurance.

Some businesses in Georgia already voluntarily carry the insurance to protect themselves and their assets. Many businesses do not, though, including some smaller operations that have stated that the insurance is not affordable. Rep. Dudgeon stated:

“The state is giving them the privilege to sell alcohol which is something the state, by our constitution, regulates and if you’re giving them the privilege and they have to pay a fee for that it seems we can make requirements.”

There will obviously be discussions and debates about adding another cost and layer of government to operating a business in Georgia versus protecting the overall welfare of Georgia citizens.

53 comments

  1. Three Jack says:

    Way to go GOP, more regulations based on a kid illegally entering a bar. How about a new law that punishes kids illegally entering bars intead of punishing the business.

  2. saltycracker says:

    Complexity is a lawyers best friend – why wouldnt a liquor license come with a requirement for min. Liability policy?

    • John Konop says:

      Same concept why people need car insurance, health insurance…..If not you are taking away other peoples rights….I had first hand experience when an uninsured motorist hit my car and took off….Had that not been a law…That guy would of bolted rather than pay me over time…..

  3. Ellynn says:

    I grew up in Wisconsin, a state with a tavern association that is so powerful there is no state alcohol tax, little to no licensing fees (dependant on the local government), selling laws that allow you to have bars open from 6:00 AM (just in time for 3rd shift to end) to 1:30 AM during the week, and until 3:30 on Friday and Saturdays – with no such thing as a food requirement to sell on Sundays, and you can walk into your local Walgreens to buy a gallon of vodka between the hours of 8:00 AM until 9:00 PM every day of the year, not to mention some of the least restrictive laws to sell and bottle craft beer in the country.

    Not only does Wisconsin require any business selling alcohol (bar or store) to carry liquor liability insurance, but bartenders have to carry a personal policy too. If any of you have seen the map of grocery stores vs bars in a community, you know this has not slowed business down in the land of Lienie’s, Miller, and brandy old fashions. I can also tell you it has not greatly effected the price of drinks. My Jack and Ginger is still about $2 less there then what I pay in Georgia for the same drink.

    Stop whining and do the right thing bar owners.

    • Will Durant says:

      Aren’t their regs on bouncers taking ‘roids? The regs list is already too long.

      I don’t know the cost of the insurance and doubt this will hurt the majority of bars/restaurants, but it will be the death knell for some of the old time rural beer joints. Perhaps a revenue cap on the requirement?

  4. Mike Dudgeon says:

    The CBS news story was a bit incomplete, and made it sound like the legislation was already far down the road. There actually were several issues brought up by this tragedy, and I am still in an investigative mode to see what if anything would make sense in legislation. Insurance is one of them but no bill has been crafted at this point.

    • gcp says:

      Don’t know if we necessarily need a state law. Looks like counties/municipalities already have the authority to require insurance under 3-4-110.

    • Scot says:

      As bloggers become more and more a primary news source, I’d encourage the authors of these articles to call legislators that are mentioned in news stories to get the full story. We have some of the most accessible elected officials in the country, and reaching out would do a lot to help us all keep the record straight.

      • Lawton Sack says:

        Rep. Turner,

        Thank you for the input. I did a lot of research into this, as the incident occurred in the town I have always lived in. However, I did not go directly to Rep. Dudgeon, but I relied on outside sources. Another lesson learned.

    • Lawton Sack says:

      Rep. Dudgeon,

      I sincerely apologize if I mis-characterized your intentions with this bill. I have always lived in Statesboro, so this was a story that has been in the spotlight here for the last 2.5 months. I relied on some outside sources, but as indicated by Rep. Scot Tuner below, I should have gone to you directly.

      Hopefully, the feedback will still be useful.

      • John Konop says:

        Lawton,

        It was tragic enough for family and friends……but to stick the parents with the bill is to add injury to insult….This is all about personal responsibility….If you stick society with your bills and claim freedom of choice that is BS… You owe nobody an apology for bringing up this issue…..Mike Dudgeon should thank you for speaking out…. just my 10 cents….

    • John Konop says:

      Mike Dudgeon,

      In all due respect, this is about freeloaders sticking parents with a bill after a tragic incident the business helped create…..It was his employee….help us all understand why he should not be responsible for having his employee beating this kid to death? I am old school, if you cannot pay you should be able to take the risk.

  5. saltycracker says:

    So what public businesses can be operated in GA without liability insurance and what makes liquor excused ?

      • gcp says:

        Georgia businesses not required to have liability insurance but must have workman’s comp insurance if over certain number of employees (three or more) also must have all business vehicles insured. There may also be some industry specific requirements but there is no general requirement in Ga.

        • saltycracker says:

          So the responsibility is on us to determine if a place with a business license has (liability) insurance ? Why is Rep Dudgeon proposing one off (liquor liability) insurance in a world of public business licenses ? Isnt this then a legislative/lawyers game rather than for the general public?

          So, picking a field, the next time you take your kid to a ride or rent a leaky boat, we may or may not be dealing with an insured operator ? Depends on if it just happens to be in the stack of legislative types of businesses for liability insurance ?

          • John Konop says:

            Salty,

            If someone signs away their rights and agrees to take the risk than the business should not be held liable, as long as they were not negligent and or misrepresented risk. Had this been an organized fight with parties agreeing to the terms….I am a 100% libertarian. In this case it appears the business had an employee that acted in a negligent manner. By not having proper insurance he shifted the risk to the public.

            • saltycracker says:

              John
              We are on different tracks. I’m talking insurance or waiver with business licenses – and a bar is not a “waiver” business, it is a license with insurance circumstance.

            • Ed says:

              If a business is at fault, they are liable. Doesn’t matter how many pieces of paper you sign or posters that say otherwise.

              • John Konop says:

                I disagree with that…..If someone knowing takes the risk of taking jumpy cord ride, race car……and signs off and gets hurt it should be on them. BTW unless they had issues with product and or people….ie bad cord, bad harness, employee punches defenseless customer to death…..

          • saltycracker says:

            PS in the event the cost of liability insurance might be prohibitive, like an adventure outfitter, the legislators can consider a waiver the customer reads and signs.

            Right now it appears business licenses are primarily govt revenue producers, public employee funders and shields if something goes wrong. With the catchy public safety tune that if something does go wrong and the business is caught, the license can be revoked, maybe fined and the business might have to restart.

            Might be better to have licenses connected to qualified insurance than connected to more public employees. Software can monitor that.

          • Jon Richards says:

            Salty:

            Look at it this way: A business (or for that matter an individual) is always potentially liable for any injuries or damage he or it may cause others, regardless of whether or not there is insurance coverage. In some cases, there will be liability insurance, in other cases, the person may self-insure, there may be a combination of the two, or there may be no insurance at all.

            It’s up to the other party in the transaction to determine whether the person they are dealing with has the resources to pay for a potential damage claim.

            • John Konop says:

              ….It’s up to the other party in the transaction to determine whether the person they are dealing with has the resources to pay for a potential damage claim…

              What you are saying is if I flag down a taxi, we should not have mandatory insurance laws for them…instead I should check his liability before taking a ride?

            • saltycracker says:

              Jon
              Am aware of the current risk level – the govt licensing process is inefficient and not adequately protecting the public – and the answer is not in selective/complex processes/enforcement and more public employees……

          • Ellynn says:

            A straight liability polocy has a limited scope of what it can and can not do for a business. Engineer and architecture firms have to carry special construction libiality polocies on top of basic liability. Plus they and every constactor has to carry a bond on each project to insure completion of the project and that subs get paid.

            A liquor liability poliocy overs a bar for the stupidity of drinkers and the failures of the owners. It covers them for minors who seek in (and estimate 25 % of minors have fake ID’s), bouncers who break an arm throwing fighting military men out of night clubs, the guy at the end of the bar who is hit in the head by a flying beer bottle thrown by the Carolina fan but was meet for the loud Duke fan four chairs away. It is very specific. The best way I can explain it is as a jewelry rider to homeowners insurance.

            • saltycracker says:

              Agree, I think, Liability insurance insures both the owner and the customer from one of the others negligence or stupidity.
              I carry it, have no expectation of another individual carrying it but do have an expectation that a licensed business carries it.

              • gcp says:

                As the others stated you can sue whether a business has liability insurance or not but sometimes its easier to recover damages if they got insurance.

                With the exception state “dram shop” laws, taxes on alcohol, and setting drinking age, alcohol serving businesses are mostly regulated by counties/municipalities.

  6. Furious says:

    The bar that both Michael and Grant were at is actually classified as a restaurant in Statesboro as they do not technically have any bars that are 21 and up only. This establishment, under the law, allowed 18 year olds to enter legally. This establishment is known for serving alcohol to minors on a regular basis. If you read the open records investigation, it clearly shows that.

  7. Jon Lester says:

    I never want to work in the service industry again, but I would agree that anyone running a bar without liability insurance is taking a very large and easily avoidable risk.

    • Jon Lester says:

      Actually, I don’t know that my favorite bar owner actually has such a policy, but he’s pretty tight with ID’s and such, and very smart with his money, unlike so many other Athens-area upstarts who might spend a high six figures before they earn their first dollar back.

  8. I had to chuckle at all the speculation above because, unlike you all, I do, in fact, possess a permit for Consumption of Alcohol on Premise (the technical term for the thing).

    See, here’s a problem, especially for non corporate restaurants: you can’t get coverage. We have known since 2007 that we could not get that type of coverage because as a convention center (all ages) and a restaurant (18-up), and we chose to stay open later house to allow patrons to sober up more, our agent could not find us insurance.

    Indeed even our general liability has so many caveats that it is basically useless, and went from $10k annual to $38k with no changes other than the first underwriter simply decided to stop covering such businesses.

    After seven years, finally, this year, my underwriter actually found someone who would offer us such a liquor liability policy. You don’t want to know how much it was…

    The GA Restaurant Association (or whatever they are called) will never allow this bill to come to fruition. We, as bar owners, simply need to make sure our systems are in place, that we do the best we can to avoid overpouring or contributing to ‘issues’, check ID with more than average scrutiny (this is not at all what the law requires – that we do not serve anyone under 21. What we do in order to comply is not law, but company policy).

    If the club cited above in the OP was routinely serving under age drinkers, they deserved to lose their license on those violations alone.

    • Jon Lester says:

      You wouldn’t like Athens-Clarke County and its unconstitutional 2:45 ordinance. Late night disco was something of a public service; now everyone’s forced out at this arbitrary time, and of course there are many who get in their cars and drive right then.

    • Ellynn says:

      I don’t know if they sell out of state, but there are a large number of underwriters based in Madison Wisconsin who specialize in liquor liability insurance. My great uncle and cousin’s have to have one to serve at their restaurant in Sheboygan Falls. And state don’t mess around with these things or when you have to have one. Even a beer garden set up at my hometown church picnic last month needed an event level one day only liquor liability poliocy.

  9. Harry says:

    Convenience stores or restaurants in Gwinnett who sell to minors are crazy. My younger daughter sometimes works as a “decoy” with the deputies and earns the county $1,500 or $2,000 every time out.

    • Jon Lester says:

      One of the documents that every license holder is required to post, in a conspicuous place, clearly states that it’s unlawful for anyone under the legal age to attempt to purchase an alcoholic beverage at all. Are you in support of breaking one law to enforce another?

      • Harry says:

        Tell that to the deputies. All’s fair in this war. I have no sympathy for those who don’t check IDs. Do you have any idea how many teens were being slaughtered in road accidents every month?

        • Jon Lester says:

          That is a stupid answer, Harry, and it makes you look like a damn fascist. And to answer your question, yes, I know about what the numbers are, and they aren’t very different from when the legal drinking age was lower. If anything, matters are worse.

  10. Bull Moose says:

    Great idea.

    This incident had so many unfortunate parts to it. Being familiar w/ Statesboro and knowing a few folks who had worked there, this was an avoidable and preventable situation.

    Liability insurance, is at a minimum, the first issue that needs to be addressed. To some extent there has to be some sort of consistent policy or regulation, at the state or local level, regarding people who work in a bar. As noted, it is a privilege to have a license to dispense alcohol and there must be certain consistent responsibilities and legal requirements that go along hand in hand with that privilege.

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