Businesses that serve alcohol to patrons can sometimes be held responsible for the actions of any intoxicated patrons. Should patrons cause harm to someone else or be injured themselves, a liability claim might be filed against the serving business. Liquor liability insurance helps shield Massachusetts that serve alcohol from potential lawsuits like these.
Liquor liability insurance is a form of liability coverage that’s designed to protect businesses that sell alcohol from liability claims over alcohol-related incidents. When businesses face covered claims, liquor liability policies typically cover legal fees and settlements associated with the claims (up to policies’ limits).
Most Massachusetts businesses that sell alcohol to consumers should carry liquor liability coverage. This includes both businesses that sell alcohol for on-premise consumption (e.g. restaurants, bars, nightclubs, and event venues) and those that sell alcohol for off-premise consumption (e.g. wine and liquor stores).
In fact, many of these kinds of businesses can’t operate without a liquor liability policy. Massachusetts state law requires businesses to have a policy that meets minimum requirements in order to obtain a liquor license from the Alcohol Beverages Control Commission.
Additionally, businesses that don’t sell alcohol but will be serving it during an event may also want liquor liability coverage. These businesses don’t normally need coverage year-round, but they might want to purchase coverage for when their event will be taking place. Usually, coverage for specific events can be obtained through event insurance policies.
Bartenders, tasting guides, servers and others who serve alcohol usually ought to have liquor liability coverage in case they’re personally named in a lawsuit. Often, however, they don’t need to purchase a policy because they’re protected by the policy of the business they work for. For example, a restaurant’s liquor liability policy may provide coverage for the restaurant, its owners, and all employees (including any bartenders or servers it has).
To make sure they’re covered, employees should ask for a copy of their employer’s liquor liability policy. They can then review the policy themselves or ask their own insurance agent to read through it. Should an employer’s policy not cover employees sufficiently, policies for individuals are frequently available.
Liquor liability policies can protect businesses from a number of potential alcohol-induced incidents. A few examples include:
(The particular incidents that a policy protects against are determined by its terms and conditions. They may vary from this list.)
A number of factors impact liquor liability policies premiums. Some of the considerations insurers take into account when underwriting policies include the following:
While some liquor liability policies may cover alcohol-related incidents involving underage patrons, many policies exclude claims arising from the actions of intoxicated underage patrons. Therefore, businesses must be careful to check patrons’ IDs regardless of whether businesses have liquor liability protection.
Businesses in Massachusetts that need liquor liability insurance should contact an independent insurance agent. An independent agent can help determine precisely what protections a business ought to look for, and they can request quotes from different insurers for liquor liability insurance policies that provide those coverages.