The Dram Shop Law in Colorado

pouring shots of whiskey as an illustration of a dram shop

Third Party Liability in Drunk Driving Accidents

Sadly, drunk driving remains one of the leading causes of fatal car accidents in Colorado. Impaired driving was responsible for approximately one third of all traffic fatalities in 2021, and that number continues to increase.

It is fairly common knowledge that a person driving under the influence will be held responsible for a crash. He or she will not only be liable for property damage, but also any injuries or death resulting from the accident. Legal repercussions include license suspension, fines, community service, and even jail time. 

What is less common knowledge is that a third party may also be held responsible for an accident involving an impaired driver. In certain circumstances, the establishment that sold the alcohol to the intoxicated driver can be liable for an accident. This is known as the Dram Shop Law, and it applies in two scenarios:

-The driver was under 21 years of age

-The driver showed visible signs of drunkenness and was not cut off at the establishment

In other words, the Dram Shop Law holds businesses accountable for serving alcohol to minors and for negligence involving over-served patrons. 

What Counts as a Dram Shop?

Dram Shops were popular establishments in 18th century England that sold gin by the spoonful, or “dram.”  Today, the term applies to any business legally licensed to sell alcohol, including:



-Liquor Stores


Dram Shop Liability vs Social Host Liability

Social host liability involves an accident or injury that occurred under the watch of someone organizing a private event that served alcohol, such as a house party or holiday celebration. Even though they are not selling alcohol, the individual or individuals hosting the event can be held liable for a DUI accident. 

However, social host liability only applies in cases of minors being served alcohol. Unlike Dram Shops, social hosts cannot be held responsible for an accident that involved intoxicated guests over age 21, regardless of whether or not they were visibly drunk and allowed to keep drinking. 

Social hosts can be liable for physical altercations that occur on their property as a result of alcohol intoxication. However, this falls under personal liability and is typically covered under homeowners insurance.  

What Damages are Awarded in a Dram Shop Liability Case?

Certain expenses, such as medical bills, funeral costs, property damage, will fall to the alcohol vendor, should they be found liable in an accident. 

Colorado caps the amount of damages that can be claimed under Dram Shop liability at $150,000. 

The statute of limitations for filing a dram shop liability claim is one year, or 365 days, from the date of the accident.

How to File a Dram Shop Liability Claim 

If you suspect your accident or the accident of a loved one was due to the negligence of a third party Dram Shop, you will want to speak with an attorney. An experienced insurance claims lawyer will help you conduct a thorough investigation in order to prove that a vendor served alcohol irresponsibly, ultimately leading to a crash. 

David Roth is a highly qualified insurance claim attorney in Colorado. If you or a loved one has been harmed in a DUI accident, contact our office or go online to schedule your free consultation.