Section effective January 1, 2026. See, also, section 61-2-145 effective until January 1, 2026. (A) In addition to all other requirements, a person licensed or permitted to sell alcoholic beverages for on-premises consumption, which remains open after five o'clock p.m. to sell alcoholic beverages for on-premises consumption, is required to maintain a liquor liability insurance policy or a general liability insurance policy with a liquor liability endorsement with an annual aggregate limit of at least one million dollars during the period of the biennial permit or license, unless the person licensed or permitted to sell alcoholic beverages qualifies under the terms of a liquor liability risk mitigation program pursuant to subsection (E). Failure to maintain this coverage during the entire period of the biennial permit or license constitutes grounds for suspension or revocation of the permit or license and is sufficient grounds for the department to seek an emergency revocation order as provided in Sections 12-60-1340 and 1-23-370(c). An insurance policy issued pursuant to this section must provide for minimum coverage of at least fifty percent of the total aggregate limit, per occurrence, giving rise to the claim. (B) The department shall add this requirement to all applications and renewals for biennial permits or licenses to sell alcoholic beverages for on-premises consumption, in which the permittees and licensees remain open and sell alcoholic beverages for on-premises consumption after five o'clock p.m. Each applicant or person renewing its license or permit, to whom this requirement applies, shall provide the department with documentation of a liquor liability insurance policy or a general liability insurance policy with a liquor liability endorsement in the required amounts. (C) Each insurer writing liquor liability insurance policies or general liability insurance policies with a liquor liability endorsement to a person licensed or permitted to sell alcoholic beverages for on-premises consumption, in which the person so licensed or permitted remains open to sell alcoholic beverages for on-premises consumption after five o'clock p.m., must notify the department in a manner prescribed by department regulation of the lapse or termination of the liquor liability insurance policy or the general liability insurance policy with a liquor liability endorsement within thirty days of the lapse or termination. (D) For the purposes of this section, the term "alcoholic beverages" means beer, wine, alcoholic liquors, and alcoholic liquor by the drink as defined in Chapter 4, Title 61, and Chapter 6, Title 61. (E) A person licensed or permitted to sell alcoholic beverages for on-premises consumption, which remains open after five o'clock p.m. to sell alcoholic beverages for on-premises consumption, may qualify for liquor liability risk mitigation. A licensee or permittee qualifies if the licensee or permittee: (1) stops serving alcohol by twelve o'clock a.m. for the entire policy period; (2) has all employees who serve alcohol complete an alcohol server training course pursuant to Title 61, Chapter 3, within sixty days of employment in that capacity; (3) has less than forty percent of its total sales deriving from alcohol sales; (4) uses a forensic digital identification system that validates the identification of any person attempting to enter the premises between the hours of 12:00 a.m. and 4:00 a.m.; or (5) is a nonprofit organization which is exempt from taxation pursuant to Section 501(c)(3) of Title 26 of United States Code, as amended, or the entity is engaging in a single event for which a Beer and Wine Special Event License or Liquor Special Event Permit is obtained. (6) A licensee or permittee meeting the requirement of item (1) may reduce the required annual aggregate limit by two hundred and fifty thousand dollars. A licensee or permittee meeting the requirements of item (2), (3) or (4) may reduce the required annual aggregate limit by one hundred thousand dollars per item satisfied. A licensee or permittee meeting the requirements of item (5) may reduce the annual aggregate limit by five hundred thousand dollars. A licensee or permittee who has met the requirements of any combination of items (1)-(5) must receive the permitted reduction in the required annual aggregate limit for each item the licensee or permittee complies with provided a person licensed or permitted to sell alcoholic beverages for on-premises consumption, which remains open after five o'clock p.m. to sell alcoholic beverages for on-premises consumption, must at all times maintain coverage with an annual aggregate limit of at least three hundred thousand dollars during the entire period of the biennial permit or license. (7) Insurers must establish liquor liability mitigation measures and offer reasonable premium discounts for compliance therewith that reduce the risk to the general public associated with the service of on-premises consumption of alcohol. (F) Permittees and licensees selling alcoholic beverages for on-premises consumption at any time between the hours of 12:00 a.m. and 4:00 a.m. shall use a forensic digital identification system that validates the identification of any person attempting to enter the premises as a patron. (G) For purposes of this section, the calculation of total sales shall include sales of alcohol sold for on-premises consumption and all food and nonalcoholic beverages sold on the premises where the alcohol is sold, including food and nonalcoholic beverages sold by third-party vendors. Editor's Note 2025 Act No. 42, SECTION 11, provides as follows: "SECTION 11. This act takes effect January 1, 2026, and applies only to causes of action or claims arising or accruing after January 1, 2026, and applies to all policies issued after that date, other than Section 61-4-523 which takes effect upon approval by the Governor." 2017 Act No. 45, SECTION 2, provides as follows: "This act takes effect on July 1, 2017, and any person applying for a new biennial permit or license for on-premises consumption under Title 61 after this date must comply with the provisions of this act at the time of the application. A person renewing a biennial permit or license under Title 61 after this date must comply with the provisions of this act at the time of the renewal." Effect of Amendment 2025 Act No. 42, SECTION 8, rewrote (A); in (C), inserted "within thirty days of the lapse or termination" at the end; and added (E) to (G).
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