House Panel Considers Bills to Ease Alaska's Liquor Liability Insurance Crisis

Alaska lawmakers are wrestling with a liquor liability insurance crisis that threatens the state's hospitality industry, according to testimony at Monday's House Labor & Commerce Committee hearing. House Bill 306, sponsored by Representative Zack Fields, would raise the legal standard for proving establishments overserved intoxicated patrons from "preponderance of evidence" to "clear and convincing evidence." The change aims to attract more insurance carriers to Alaska, which currently has the worst liquor liability rating in the nation. "Alaska has the worst rating, an 8 by ISO (the Insurance Service Office), in the U.S. for liquor liability insurance, categorized as a 'crisis zone' for coverage," said Public Testifier Kyle Ivanoff. Public Testifier Mike Dennis told lawmakers that premiums have "tripled or quadrupled" from $15,000-$20,000 annually to $60,000 or more. The dramatic premium increases have forced some establishments to consider closing or significantly reducing operations, while others struggle to find coverage at any price. The committee also heard HB 363, which would expand alcohol sales privileges for patriotic organizations like the American Legion and VFW. The bill allows these groups to serve members from other veteran organizations and serve spirits at special events. Dennis warned that Alaska is "one bad claim away" from potentially having no liquor liability coverage at all. Five of the state's seven insurance carriers left the market in 2022-2023, leaving businesses with severely limited options and creating a bottleneck that has driven up costs for remaining policyholders. Lawmakers expressed uncertainty about whether the proposed changes would be sufficient to lower Alaska's ISO risk rating from 8 to the target of below 5, which other states have achieved to attract more carriers.