Liquor liability insurance is business insurance that protects your business against loss or damages claimed as a result of a patron of your business becoming intoxicated and injuring themselves or others. In the state of Massachusetts, if your business manufactures, sells, serves, or facilitates the uses or purchase of alcohol, then your business is required to have this coverage. The law requires coverage limits of a least $250,000 per person and $500,000 per occurrence.
Here are some options to consider when reviewing liquor liability insurance:
• Assault and Battery Coverage - Most claims against bars and restaurants are the results of fights. Your liquor liability policy should include coverage for assault and battery claims. If not, the policy has a much lower real value.
• Defense Costs Included - The biggest cost facing your business in these types of claims is the cost of retaining a lawyer against frivolous claims. Some insurers sell policies where "defense costs" are deducted from the total coverage. That is, your $500,000 policy is reduced to $400,000 because of $100,000 in attorneys' fees. Even if the premium is lower, pass on a policy if it does not provide your business with skilled, appointed legal counsel that does not reduce coverage.
• Employees Included - If you serve alcohol, then employees will drink regardless of the rules. On some policies employees may be excluded from coverage so make sure employees are covered as patrons to ensure that you are properly covered.
• Damage Definition Includes Mental Damages - Claimants may claim they were damaged in non-physical ways: stress, mental anguish, or psychological damage. Some policies exclude these types of damages. Don't purchase a policy with limited damage definitions.
• Reduced Premiums Based on Safety and Claims - Some insurers will offer free classes and training to their insureds’ employees and discounts on premiums for having safety training and no claim history. Those insurers will reduce premiums by 15-20% for this basic safety training.
Liquor liability exposure is not covered in a general liability policy and it will not cover sales that are contrary to law and sales to minors. We can work with you to review the best options for your establishment.
To get a free quote, either complete our online liquor liability quote form or call us at 800-922-8381.