Protect Yourself With Liquor Liability Insurance

Liquor Liability Insurance - HK Insruance

So you are interested in opening a restaurant. Well, it’s no secret that liquor is one of the highest providers of profit margin for restaurants. The sale of liquor is an excellent way to increase profit in a tough and competitive industry. Your servers will also be happy to see their tip totals going up, as the check amounts increase. In fact, some patrons may or may not find themselves more generous with tips as they consume alcohol. So why not serve alcohol and let everyone have a good time? The reality is that there are potential risks that must also be considered.

The Dangers of Liquor Litigation

The biggest hesitancy about serving liquor in your restaurant is that you will be opening yourself up to potential litigation. Liquor lawsuits are common and can be very expensive. Legally, it is not only bars and liquor stores that are vulnerable to liquor litigation. In fact, any establishment that has anything to do with the purchase or use of liquor is open to litigation concerning the abuse of liquor.

Here are several examples of parties who need liquor liability.

  • Bars & Taverns
  • Casinos
  • Catering Companies
  • Convenience Stores
  • Distributors & Manufacturers
  • Fraternal Organizations
  • Hotels
  • Liquor Stores
  • Restaurants
  • Special Events
  • Sports Facilities & Complexes
  • Wineries

Even if alcohol is a small part of your services, you should have coverage to ensure you will not get in trouble. Liquor law in Massachusetts depends on what type of establishment you are.

Licensed Server Liability

There are two general categories for alcohol servers. The first is a licensed server.  In 1968, Massachusetts law has allowed lawsuits against a server holding a valid liquor license, if the patron then caused hurt to a third party. The most common example is a case of drunk driving. There are several things which must be proved before the licensed server becomes liable, such as intoxication and foreseeable risk.

Social Host Liability

This category reflects a situation where someone who is not licensed is serving alcohol, like at a wedding or private party. In this case, the social host is liable, especially as pertains to cases of drunk driving or violent injury. However, if you are just hosting a backyard cookout, have everyone bring their own beer. A social host is not liable for an intoxicated guest, if it is a BYOB event.

Protecting Your Restaurant Against Liquor Litigation

By simply following state law regarding things like the drinking age and serving alcohol to someone who is intoxicated, you will protect yourself against most claims ever gaining any traction. However, despite your best efforts to serve alcohol in a purely legal fashion, liquor liability insurance is extremely important for a bar, tavern, or restaurant. This insurance will cover not only a substantiated claim made against you, but any legal fees or expenses associated with a groundless claim.

For more information about holding a Liquor Server license in Massachusetts, read this FAQ from the Alcoholic Beverages Control Commission.

We hope this article has helped you understand what liquor liability is and why you should have insurance for it. If you have any questions on your insurance policy or other business coverage you should carry, please contact the H&K Insurance Agency. We’ll help you get your restaurant fully insured and help you reduce the risk to your business.

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