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 Iowa, dram shop laws are codified under Iowa Code Section 123.92, which holds that a person who sells and serves alcoholic beverages to patrons can be held liable for damages caused by an intoxicated person if the alcohol was sold or served to someone who was visibly or obviously intoxicated, or to a person whom the server knew or should have known was intoxicated. This means that bars, restaurants, and other licensed establishments in Iowa may face legal consequences if they serve alcohol to an obviously intoxicated individual who then causes injury or property damage. The law aims to encourage responsible serving practices and provides a means of recourse for victims of incidents involving intoxicated individuals. It is important for establishments that serve alcohol to be aware of the signs of intoxication and to have policies in place to prevent over-service.