Vermont committee hears split testimony on repealing mandatory liquor liability insurance

Montpelier — Lawmakers on the Government Operations & Military Affairs committee heard competing arguments January from hospitality industry representatives, insurers and victims’ advocates about whether Vermont should repeal a 2023 law that mandated liquor liability insurance for some licensees.

Justin Hajek, owner of the Main and Mountain Barn Motel in Ludlow, told the committee he supports responsible alcohol service but not a one-size-fits-all insurance requirement. "I do not support a universal liquor liability insurance mandate that applies equally to all establishments regardless of business model or risk profile," Hajek said, adding that insurers price policies by revenue mix and that a July quote he received was about $14,393 for the year for liquor liability coverage.

The ministerial context: proponents of repeal, including Amy Spear, president of the Vermont Chamber of Commerce, said national reinsurance and casualty-market pressures have led to reduced carrier participation and large year-over-year premium increases for some members — she cited "20 to 40%" increases reported by businesses — and argued repeal would not change civil liability or licensing oversight. "Repealing the mandate for liquor liability insurance does not remove accountability," Spear said, noting Vermont’s dram-shop framework, licensing and mandatory education remain in place.

Mary Block, deputy commissioner of insurance at the Department of Financial Regulation, described liquor liability as a specialty line in a "hard market" and warned lawmakers that a statutory purchase requirement cannot force carriers to write coverage where capacity is constrained. Block said changes to Vermont’s dram-shop law in 2023 reduced an ISO rating the state had held (she described an ISO shift from 10 to 5), which helped normalize market perceptions, but national reinsurance pressures and litigation costs continue to push premiums upward. "Mandating coverage does not make coverage available," Block told the committee.

Advocates for keeping the mandate framed the issue as one of financial responsibility for victims. Adam Neacrassen of the Vermont Association for Justice urged caution in repealing the requirement, describing cases in which catastrophic injuries adjacent to nightlife left victims without a financially solvent defendant or insurer to cover damages. "Someone crosses the center line at 02:00 in the morning, and the voice I bring to the table is your constituent that now is facing lifelong catastrophic injuries," Neacrassen said, arguing insurance ensures a mechanism for compensation.

Committee members pressed witnesses on specific effects of repeal: whether victims’ ability to recover damages would change, whether licensees with prior violations could still obtain coverage, and what targeted alternatives might look like. Mary Block and the Department of Liquor and Lottery’s commissioner told the committee that coverage is available in many cases but becomes more costly for operators with violations, and that targeted requirements for high-risk licensees remain an option.

The meeting produced no vote; the chair said the committee will revisit the issue at a later meeting and requested data from agencies about market capacity and the incidence of uninsured establishments. The committee took a recess until it reconvened to consider other agenda items, including a scheduled discussion of H.694 (Bennington charter/town manager contracts).