NCTC

Liquor laws are established by the individual states and/or
municipalities. The following information is only valid for
theatre groups operating in the state of Michigan.
If you reside in another state, you should contact
your municipal/state government agencies.


Liquor laws change, the codes established under the Michigan Liquor
Control Commission [MLCC} get modified, existing codes get reinterpreted and enforcement procedures can vary.

Our agency reviewed with the MLCC the terms and conditions for securing a special event [one-day] liquor license and bond.

The following information was valid as of May, 2003.
You should contact your insurance agent in order to
confirm whether or not this information is up to date.



When your theatre company plans a special event or schedules a benefit
performance at which alcohol is going to be sold, you must secure both of the following:

1. A special event (one-day) liquor license and liquor bond
2. Liquor liability insurance.

Selling is defined as:
You provide a cash bar at the special event or benefit performance
You have an open bar or otherwise provide alcohol and ask for a donation
You include alcohol in the price of admission





If you secure the special event license/bond but do not have liquor liability insurance, you are leaving yourself open to civil actions for which your insurance will neither defend you nor contribute to any settlement reached through such actions.

If you have liquor liability insurance but fail to secure a special event license, you leave your organization open to fines and penalties as established by the Michigan Liquor Control Commission and relevant state statutes.

Put another way, getting a special event license/bond does not provide you with liquor liability insurance. And having liquor liability insurance does not absolve you of the responsibility for getting a special event license/bond.



SPECIAL EVENT [ONE-DAY] LIQUOR LICENSE AND BOND

This license is issued by the Michigan Liquor Control Commission [MLCC] You can get the license application forms online at www.michigan.gov/cis

As a nonprofit entity, you can secure up to five [5] special event licenses per year.

All profits from the sale of alcohol must go to the organization itself; not to any individual.

Local law enforcement approval is required for a special event license. There is a portion of the license application form that must be signed by a local law enforcement representative. Law enforcement representatives are allowed to inspect your premises.

MLCC needs at least ten [10] working days to process a special event license application.

The MLCC prohibits you from selling anything other then beer or wine on Sundays unless you are granted a special permit to do so which is in addition to the special event liquor license.

When applying for a special event license you have to pay the state for the license and your insurance agency for the special liquor bond. This bond is NOT liquor liability insurance. This bond is to protect your group in case you are charged with a violation of the liquor laws and are assessed a fine. The MLCC will not issue you a special event liquor license unless you also get a liquor bond to go with it.


LIQUOR LIABIITY INSURANCE

Under 436.1801, Sec. 801(3) of the Liquor Control Code (Dram Shop section) a licensee may be held criminally liable for deaths and injuries associated with sales to minors or visibly intoxicated persons if the unlawful sale is proven to be a proximate cause of the damage, personal injury, or death of an individual. Under the laws of the State of Michigan you can be held liable in a civil action as well.

If you do not have liquor liability insurance & there is a claim/lawsuit against you, your insurance will not defend you nor will your insurance contribute to any judgment made against you.

Unless your group has specifically purchased liquor liability coverage as part of your general liability insurance, your policy does not provide liquor liability insurance.

You can secure liquor liability insurance by having the coverage added to your existing general liability insurance policy. Liquor liability insurance does not cost that much and it typically provides a $1,000,000 per common cause limit of insurance. Contact your insurance agent for the current cost for this coverage.

An alternative to adding liquor liability coverage to your policy is to hire a caterer that is licensed to "sell" liquor. The caterer then assumes the liquor liability. Your group should require the caterer to provide you with a Proof of Insurance Certificate. Your group still must secure the special event liquor license and bond, but the caterer would carry the liquor liability insurance instead of you.

Another alternative is to hold your event off premises at a site that carries liquor liability such as a restaurant, banquet facility, country club etc. In these cases, you do not need a special event (one-day) liquor license or liquor liability insurance. Both the license and insurance become the responsibility of the premises owner.


BENEFIT PERFORMANCES

Many groups offer special benefit packages in which they "sell the house" to a group who then uses the benefit performance as a fundraising event.
If alcohol is going to be sold [see definition of selling above] then a special event liquor license and liquor liability insurance are required.

In the case of such benefit situations, the question becomes who gets the license and who is responsible for the insurance.

You can have the benefit group secure both the special event license and the insurance.

You can have the benefit group secure the special event license and have your group provide the insurance.

You can have your group secure both the special event license and the liquor liability insurance.
The reality is that we live in a litigious society.
The only way to be sure that your theatre company and
your members are protected is to be sure that you have both
elements when planning a special event or a benefit performance.
Contact your insurance agent to see that you have the protection you need.