An Opinion Editorial by Commissioner Troy Downing 

As the Montana Insurance Commissioner, I am often asked about high premiums in certain lines of insurance. One example is rising premiums in wildfire risk areas. This makes intuitive sense − if the risk of fire and loss is higher, the premium increases to ensure the insurance company can cover their potential losses.

An area of insurance that is not always as obvious is liability coverage. In public policy, it is important the law addresses damages to someone when there is obvious negligence that contributed to loss or injury. However, sometimes the law is too broad and covers more than what a normal person would consider reasonable

One simple example in Montana is liquor liability − the liability of a bar or restaurant if they serve a patron and there is resulting injury or loss. In recent years, several bar and restaurant owners reached out to me regarding the growing costs of insuring this liability. The premiums were quickly growing, and these small business owners faced the very real problem of not being able to afford their premium payments to stay in business.

The question begs itself − if a server at a restaurant serves an apparently sober customer a drink, and that same customer goes elsewhere and drinks more until intoxicated, and then harms another due to their intoxication − should the server at the original restaurant be held liable?

The first step in addressing issues like these are to look at liability laws on the books and decide if they make sense. If not, the next step is to clarify and modify these laws to rein in what may be unreasonably broad while still maintaining the ability for a victim to seek restitution and damages when warranted.

This session, Senator Steve Fitzpatrick sponsored Senate Bill 107 to address this liquor liability issue by delineating the circumstances when a server may be liable. This still allows a wronged person to pursue recovery of actual lost economic damages, while still allowing punitive damages under certain circumstances.  SB 107 protects consumers and small businesses and gives clarity to liability exposure to help slow increases in liability premiums.

If we can find places where reasonable tort reform will help reduce liability, while still protecting the public interest, we have the potential of making it easier and less expensive for businesses to operate, grow, innovate, and hire more employees in our great state.

I applaud Senator Fitzpatrick and the Montana Tavern Association for addressing this root cause of rising premiums, and Governor Gianforte for signing this into law.

Troy Downing is the Commissioner of Securities and Insurance, Montana State Auditor. Commissioner Downing is a two-tour combat veteran, businessman, and entrepreneur.

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