What is Liquor Liability Insurance?
Liquor liability insurance helps protect establishments that serve alcohol from liability lawsuits related to the actions of intoxicated patrons. Although it may seem like individuals should be held responsible for their actions, establishments that enable individuals to become drunk are often sued for any damages or injuries that are brought about by the intoxication. In many cases, these lawsuits can be for large sums, and they’re often devastating if a business doesn’t have a liquor liability policy.
What Establishments Need a Liquor Liability Policy?
Any establishment that sells alcohol, whether for on-premise or off-premise consumption, should have a liquor liability policy. The list of businesses that ought to have coverage includes (but isn’t limited to):
- Restaurants that serve alcohol
- Bars
- Nightclubs
- Liquor, wine, and beer stores
- Event venues that offer alcohol
Why Do Establishments Need a Liquor Liability Policy?
Establishments should have a liquor liability policy to ensure their business could survive a covered liability lawsuit. Even establishments that would prefer to self-insure, however, have to have a policy.
In order to obtain a liquor license in Massachusetts, an establishment must provide proof of a liquor liability policy that affords at least the state’s minimum coverage requirements (many businesses will want more than the state’s required minimum levels of coverage to better protect themselves).
Additionally, establishments that have loans are often required to have a liquor liability policy by their loan holder. Companies that lend money to businesses want to ensure their investments are protected, which means guarding against potential intoxication-related lawsuits when financing establishments that sell alcohol.
Do Establishments Still Need to Check IDs?
All establishments need to take whatever steps are necessary to make sure they don’t serve underage individuals alcohol. Not only is it illegal to give an underage person an alcoholic beverage, but most, if not all, liquor liability policies exclude incidents involving intoxicated patrons who are underage from their coverages. Thus, establishments should check IDs to ensure they don’t break the law by serving someone who’s underage and potentially expose themselves to a great financial risk.
How Can Establishments in Massachusetts Get Liquor Liability Coverage?
There are several ways for Massachusetts establishments that serve alcohol to get liquor liability coverage. It’s sometimes available through a general liability policy or certain business insurance policies. Most businesses, however, purchase a separate liquor liability insurance policy. An independent insurance agency that specializes in commercial insurance policies can help you determine which method of obtaining coverage is best for your establishment.
The Reality of Serving Liquor in Massachusetts
Intoxication often leads to questionable actions, ones that sometimes result in accidents. If an intoxication leads to property damage or bodily harm, the intoxicated person may not be the only party held responsible for the incident. Any establishment that served the person alcohol might be held liable -- and forced to provide compensation for the damage or harm. Liquor liability insurance helps protect Massachusetts businesses that are involved in the sale of alcohol from this potential risk.
