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Liquor Liability Insurance in Massachusetts

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.

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What Types of Events Does Liquor Liability Insurance Cover?

Liquor liability policies can cover many different events, possibly including:

  • Fights between intoxicated patrons
  • Car accidents that intoxicated patrons are in after leaving an establishment
  • Falls patrons suffer after becoming drunk

(The exact events that a policy covers will depend on its terms, conditions and exclusions).


Do Businesses That Have Liquor Liability Coverage Still Need to ID Patrons?

A liquor liability policy isn’t a license to stop checking IDs of patrons who may be under age. Serving underage customers alcohol not only violates the law, but it also violates most (if not all) liquor liability policies. Most policies have terms that clearly state coverage will be voided if an underage individual is served. Thus, any business that serves underage individuals may expose itself to potential liability suits even if it has a liquor liability policy.

How Can Businesses Get a Liquor Liability Policy?

Liquor liability coverage is available through both stand-alone policies and commercial package policies. Whether a business is better off getting a stand-alone policy or coverage as part of a commercial package policy depends on the business’ other insurance needs and policies. For example, a bar in Westfield, MA has different insurance requirements than a liquor store in Boston, MA, and one solution likely won’t meet both business’ needs.

Independent insurance agents who specialize in commercial insurance can help Massachusetts businesses compare stand-alone policies with ones that are available through commercial package policies. As experienced and independent agents, they have the expertise and ability to review a business’ risk exposure, request quotes from multiple insurers offering liquor liability insurance and explain the details of each policy. They can make sure businesses find the best solution for their particular situations.

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