Massachusetts just got a lot more sane in the area of dealing with the legalities of liquor liability, particularly with the need for ready compensation to pay for injuries and damages that often follow negligent service of alcohol by a licensed bar or restaurant. These injuries and damages usually result from a Massachusetts motor vehicle accident, but can injuries stemming from a patron being over-served alcohol at a bar or restaurant can also occur without any vehicular accidents being involved. On May 28 2010, Governor Deval Patrick signed into law Chapter 116 of the Acts of 2010, which amends M.G.L. Chapter 138 Section 12, the relevant law in Massachusetts that governs issuance of liquor licenses to bars and restaurants.
It may come as a surprise to many readers, but previous to the enactment of this legislation, bars and restaurants were not required to carry liquor liability insurance in Massachusetts. Not in any amounts, at all. Shocking, isn’t it? Consider: If you own or operate a restaurant in Massachusetts, you are required to produce proof to the local (i.e., city or town) licensing authority of a number of different things before you can be issued a license to operate (known legally as a “victualler’s license.”) The facility needs to pass inspections by the local Board of Health, adhere to state labor laws, produce proof of workers’ compensation insurance, contribute to the state unemployment insurance system, and (almost always) carry a policy of General Liability insurance. But to be issued a liquor license, while you would have to you surmount several additional hurdles before being issued such a license, you would not have had to produce evidence of a policy of liquor liability insurance, at all.
Why is this so important? Because almost all General Commercial Liability insurance policies don’t provide liability coverage for legal damages and injuries that result from the negligent service of alcohol by bartenders and/or wait staff. So while you could swallow a piece of glass in a restaurant and the owner’s general liability policy would almost certainly pay for damages, and while you could suffer a slip and fall accident on site and there would also be coverage to pay for your damages, there wouldn’t be coverage if someone in that restaurant was negligently over-served alcohol, then left the facility and caused injury to you while intoxicated. The stark reality is that up until now, the majority (though not all) bars and restaurants in Massachusetts “went naked” when it came to liquor liability insurance. If someone was unlucky enough to be injured by (usually) a drunk driver who was negligently served alcohol at a bar or restaurant, they had to get simultaneously lucky enough that the OUI driver had been served at a facility that carried liquor liability insurance. If the bar or restaurant who negligently served the alcohol didn’t have a specific policy of liquor liability insurance, there was often no source of money to pay a liability judgment. In that case, collecting on a judgment rendered in a plaintiff’s favor, was often impossible. I’ve blogged about this in the past.
Thankfully, that has now changed. M.G.L. Chapter 138 Section 12 has now been amended to require any Massachusetts bar or restaurant owner seeking a liquor license, to first produce evidence of a valid policy of liquor liability insurance, in minimum amounts of $250,000/$500,000, before any such liquor license may be issued. The “$250/$500” provision refers to the legislative mandate that the policy provide minimum liquor liability coverage amounts of $250,000.00 for bodily injury or death for one person, and a total of $500,000.00 for bodily injury or death per incident, for more than one person within the same incident. The certificate of insurance evidencing this coverage must be in a form acceptable to the local licensing authority. Given the types of devastating injuries and long-lasting medical expenses that can result from drunk driving collisions, I have to say that these “250/500” limits are rather low. But it is a start toward improvement in this area of law, and it is certainly better than what existed previously.
So, while driving on the road in Massachusetts didn’t get instantly safer with the passage of this legislation, the odds that a victim of a drunk driver who was negligently over-served alcohol by a restaurant will have access to liability insurance to pay for his or her damages, just got a lot brighter. Governor Deval Patrick deserves credit for signing this bill into law, and the Massachusetts Academy of Trial Attorneys deserved credit for filing this legislation and securing its passage.