New Insurance Will Protect Restaurants Serving Liquor

American Express, responding to what it called a liquor liability crisis in the U.S. restaurant industry, announced an insurance program Tuesday under which restaurateurs who accept the company’s charge card will be able to protect themselves against alcohol-related lawsuits.

Officials of the financial services giant, which has more than 22 million credit card members worldwide, said it has committed $10 million in capital to help establish the program, which will be underwritten by American International Group, one of the world’s biggest insurance concerns.

The announcement came against a background of growing anxiety among owners of the nation’s 593,000 restaurants, primarily those serving liquor, about the shrinking availability and sharply higher cost of liability insurance.

Establishments that serve liquor can be held legally responsible for injuries or damage suffered due to a patron’s excessive drinking or intoxication. As a result, the number of alcohol-liability lawsuits against restaurants has tripled in the past few years, industry statistics show.

Steven D. Goldstein, an executive vice president of American Express Travel Related Service Co., told a news conference that the insurance program will strive to offer what he called “very competitive rates.”

Only the company’s 87,000 subscriber restaurants will be eligible to apply, Goldstein said. Of those, about 80% are expected to qualify.

“We’re not doing this to sign up more restaurants,” he said. American Express is concerned about liquor liability insurance, Goldstein said, because it “has become an issue of critical importance to the restaurant industry.”