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North Carolina Restaurant and Lodging Association

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September 14, 2021

ABC Violations – Other Civil Liability

North Carolina’s courts have determined that an ABC permittee has a duty to the public to take reasonable steps to prevent sales to intoxicated persons, and that if a person becomes intoxicated at the permittee’s establishment and then drives in a manner that causes injury or death, the permittee may be held civilly liable. Many business insurance policies do not cover liability arising out of this situation (known as dram shop liability). There is not a legal limitation on potential damages related to dram shop cases.

North Carolina statutes also allow a person injured because of a sale of alcohol to an underage person to sue the permittee and any individual who made the sale. This includes not just people directly injured by the underage person (e.g., an innocent driver), but also the parents of the underage person. The statute provides a liability limit of $500,000 per occurrence.

Certain ABC violations involving taxes may result in civil or even criminal enforcement through the NC Department of Revenue.

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