Gov. Linda Lingle is considering whether to sign or veto a a bill requiring businesses that sell alcohol to have $1 million in liquor liability insurance, in addition to general liability.

Sen. Rosalyn Baker (D, Honokohau-Makena) said she introduced Senate Bill 300 at the request of constituents, who worried about liability for alcohol-related accidents involving uninsured bars.

Under Hawaii's liquor liability laws, someone injured by a person who had been drinking at a liquor establishment can sue all the places at which the person had been drinking before the accident.

Young Kam, an insurance broker on Oahu, said the bill burdens small retail stores.

“;For liquor stores, it's not an easy business,”; he said. “;With the economy down, this is really an added burden for a small mom-and-pop store.”;

Many of his clients, who are bar operators, are required by their landlords to purchase liquor liability insurance in addition to the common general liability insurance. But some retailers might have not been required to purchase that until now.

Honolulu Liquor Commission Administrator Dewey Kim said commission investigators surveyed more than 30 businesses and found that while larger chains and establishments are self-insured, several small businesses lacked the insurance or were unaware of the difference between liquor liability and general liability.

There are other concerns such as whether the business will be able to afford the extra insurance and whether insurance companies will provide the insurance to businesses deemed too risky, he added.

But Fred Remington, president of the Hawaii Bar Owners Association, said most of his group's 85 members carry this insurance because it would be foolish not to.

“;For the majority, it really isn't that much of a big issue,”; he said. “;That may hurt some of the small mom-and-pop shops ... but anybody who's legitimate and has any business sense won't mind that at all.”;

George O'Hanlon, general manager of the Liquor Collection, a liquor retailer at Ward Warehouse, said the landlord has required his store to buy liquor liability insurance for about 20 years.

“;If I look at the big picture, this will help level the playing field,”; he said. “;Maybe we won't have to look so expensive.”;

The Liquor Collection pays about $5,000 a year for liquor liability insurance. The cost of the extra coverage depends on several factors, such as how much alcohol the establishment sells.

Lingle has until July 15 to act on the bill. If she decides to veto it she must notify the Legislature by June 30.