What is liquor liability insurance?
Just as adults should be responsible in the way they consume alcohol, businesses should be responsible in the way they sell it. Responsibly selling alcohol in Massachusetts generally requires that a business gets liquor liability insurance, along with checking IDs and other standard practices.
Liquor liability insurance provides businesses selling alcohol with specific liability protections against various alcohol-related lawsuits. Policies may cover legal fees and settlements.
Which businesses need liquor liability coverage in Massachusetts?
Most businesses that sell alcohol in Massachusetts are required per state law to carry liquor liability coverage. It’s generally a prerequisite to obtaining a liquor license from the state. Restaurants, bars, nightclubs and alcohol retailers all purchase this type of coverage.
Moreover, these businesses can be exposed to expensive lawsuits if they don’t have liquor liability coverage in place. To see just how expensive the liability costs can be, consider who might sue after a fight between two overly intoxicated customers:
- Each customer involved in the fight might sue on grounds that they were overserved
- Customers near the fight might sue if they’re injured by either person fighting
- Any customers in the room might sue on the grounds that they were emotionally distressed
- A driver might sue if the fight moves outdoors, and the driver’s car is damaged
While the individuals involved in the fight would likely be sued in many of these cases, it’s common practice to also sue the business that served them. Even if the lawsuits against a business are dismissed, merely defending against such suits can be expensive.