Most states have a dram shop law to deter providers of alcoholic beverages (servers, liquor stores, bars, restaurants) who sell or serve alcoholic beverages under authority of a license or permit from selling or serving alcoholic beverages to obviously intoxicated individuals.

These laws generally eliminate any liability of servers, liquor stores, bars, and restaurants when a person to whom they sell or serve alcohol causes personal injury or property damage—whether in an automobile accident, a fight, or other incident—unless the person to whom they sell or serve alcohol is obviously intoxicated.

Laws regarding dram shop liability vary from state to state and are usually located in a state’s statutes.

In Illinois, the Dram Shop Act (235 ILCS 5/6-21) holds sellers and servers of alcohol liable for damages if they provide alcohol to an obviously intoxicated person who then causes injury or property damage. This law applies to licensed establishments such as bars, restaurants, and liquor stores. The Act allows for a civil claim against the alcohol provider by the injured party or by those experiencing property damage as a result of the intoxicated individual's actions. The liability under the Dram Shop Act is subject to certain monetary caps, which are adjusted annually for inflation. It is important for establishments serving alcohol to be aware of the signs of intoxication and to refrain from serving intoxicated patrons to mitigate the risk of liability under this law.