What is Liquor Liability Insurance?
Liquor liability insurance policies are liability insurance policies that provide narrowly defined, but important, protections. They’re specifically designed to protect businesses that serve alcohol from lawsuits over damage or injury that intoxicated patrons cause. While it may seem as if the individual who caused harm should be held responsible, businesses are also held financially liable for alcohol-related incidents if they let a customer become overly drunk.
When such lawsuits are brought against businesses, they often are extremely expensive. In addition to any settlement that’s assessed against a business, it often also has to spend a lot defending itself in court.
What Kinds of Massachusetts Businesses Should Get Liquor Liability Coverage?
Any business in Massachusetts that sells alcohol ought to consider getting a liquor liability policy. This includes:
- Restaurants, bars, and nightclubs that sell drinks for consumption on their premises
- Beer, wine, and liquor stores that sell beverages for off-site consumption
- Caterers that serve alcohol for consumption at events
In many cases, businesses are required to maintain a certain amount of liquor liability coverage if they serve alcohol and have a loan. This is to ensure that the lender’s financial investment won’t be lost if a liability suit bankrupts the business.
Even businesses that don’t have any outstanding debt still usually need at least some coverage. In order to get a liquor license in Massachusetts, a business must have a policy that meets the state’s minimum requirements for liquor liability coverage.
