Liquor License Liability

Liquor License LiabilityAcquiring and renewing your liquor license are only two steps in the process of operating a profitable bar or restaurant. In Massachusetts, all Section 12 licensees are required to have liquor license liability insurance.

Liquor license liability claims typically occur when a patron overindulges and subsequently gets behind the wheel and injures or kills themselves or others. Driving while intoxicated is not the only liability issue that may arise. Assault and battery cases (think bar fight) make up half of the claims against liquor license holders, according to InsuranceJournal.com’sRaising the bar on liquor liability training.”

Massachusetts Liquor Liability Insurance Law

Massachusetts legislature amended the law in 2010 “requiring existing licensees and applicants for alcoholic beverage licenses issued under M.G.L.c.138, §12, to have a MIMUNUM AMOUNT OF MANDATORY LIQUOR LIABILITY INSURANCE COVERAGE.” (Alcoholic Beverages Control Commission Advisory Mandatory Liquor Liability Insurance.) This became effective in August of that year, and applicants or licensees must provide proof of insurance when applying for or renewing a liquor license “in a form acceptable to the local licensing authority.”

Policy coverage must include “bodily injury or death for a minimum amount of $250,000 on account of injury to or death of 1 person, and $500,000 on account of any 1 accident resulting in injury to or death of more than 1 person as a condition to receive a license.”

As with any insurance policy, the appropriate amount of coverage varies. What makes sense for a bar down the street may not make sense for your establishment. And as with any insurance policy greater coverage amounts lead to higher premiums. You will need to determine the right policy for your restaurant or pub and be able to balance the insurance cost against your bottom line.

Reducing Liquor License Liability

If you can show that you are working to avoid infractions that lead to overintoxication, you may be able to reduce your liability and subsequently the cost of your liquor liability insurance. AnswersTM Understanding Liquor Liability Business Insurance” offers these suggestions for reducing liability and insurance cost:

  • Eliminate happy hours
  • Implement a designated driver policy
  • Offer free Breathalyzer tests
  • Close early
  • Provide extensive employee training

The SafeID Check® training program is in place to help you ensure that your staff, including bartenders, wait staff, bouncers, and all front-of-house employees, can effectively and legally handle alcohol sales in your pub or restaurant.

Training is a critical component to reducing your liquor license liability and helping to ensure you never have to use your insurance policy.