Your friend goes out on the town one night, starting with a beer at the first pub and becoming steadily drunker as the night goes on. After the sixth or seventh bar, he gets in his car to drive home and causes an accident, killing someone in the process.

Which drinking establishment could be held liable for the fatality?

If you’re in Pennsylvania, every single one—even the first location, where your friend had only one drink. But in a state like Massachusetts, it would be much easier to defend the establishments that served alcohol to your friend.

Do you know the situation in your state? If you have liquor liability clients, you’d better.

“The No. 1 thing agents need to do at a minimum is know the dram shop laws for their state,” says Sandra Haley, senior vice president of underwriting and marketing at Hospitality Insurance Group. “They need to know who needs the coverage, what’s the law, who the responsibility is on—it’s really important if you’re an agent in that state that you know how to protect your client.”

According to Kathy Clark, products director for casualty for Fireman’s Fund, some states have no statutory or common law for liability based on alcohol service. “In these states, it’s the consumption of alcohol that is deemed to be the proximate cause of an injury,” she explains. “On the other extreme, you have states with dram shop laws that provide a form of strict liability in that if the alcohol sale violates the statute forbidding the sale of alcohol to an already intoxicated person or a minor, that is in itself liability—negligence doesn’t have to be proven beyond the fact that they violated that statute.”

Negligence itself carries a variety of definitions, from “simple negligence” to requiring the plaintiff to prove that a server was “willfully” and “knowingly” serving an intoxicated person—“or even, in some states, ‘recklessly’ serving an intoxicated person,” Clark says. “So the agent should really understand which legal environment they have in the states where they do business.”

Regardless of their location, your commercial clients can take steps to protect themselves. “Agents should advise their alcohol-serving clients to have their servers undergo training in alcohol service,” Clark suggests, citing programs like Training for Intervention Procedures, the National Hospitality Institute’s Techniques of Alcohol Management and state-specific beverage association programs like Pennsylvania’s Responsible Alcohol Management Training Program and Maryland’s Beverage Education and Server Training Program.

But even with training and ongoing refresher courses, it’s possible for businesses to run into trouble—which is why you should also advise your liquor clients to have a written policy for serving alcohol “and review it regularly with their servers,” Clark says. “The training and serving according to the training can prevent incidents from happening, but the written policy and documentation of adherence to that policy is going to be your first line of defense if an incident should happen.”

In a line of coverage ripe for lawsuits, the devil is in details like these when it comes to your ability to protect your commercial clients. “Knowing your niche, understanding it, knowing how bars work and that this is really a cash business in many local bars—that’s really critical,” Haley says. “You have to understand your industry.”

Jacquelyn Connelly is IA senior editor.