Does MJ recommend obtaining liquor licenses from third-party vendors?
In short, our experience has led us to understand that requiring the liquor license from a venue is an administrative burden that ultimately confuses members and leads to less emphasis on collecting proof of General Liability and Liquor Liability insurance, which will ultimately provide more protection to the Chapter and your Inter/National Organization.
Every state has established a division to be responsible for the manufacture, distribution, and sale of alcoholic beverages, often times referred to as the “Alcoholic Beverage Commission” or ABC. These governmental units control and manage every aspect of this business, from the licensing of a venue to be able to serve the alcohol to regulating the business practices of the venue. We have the utmost confidence in the ABC’s regulation of this area, especially in campus towns and larger cities. We think that it would be highly unlikely that a venue is serving alcohol where they aren’t licensed to do so, and feel comfortably assuming that the licensing standard has been met by the venue.
In addition, your coverage under your General Liability policy does not hinge on a venue having a license. Stated another way, there is no exclusion for coverage if the venue isn’t licensed. We do know that this is the exception as many of the other insurance companies’ form do in fact have this exclusion.
Based on these two factors – ABC adequately manages liquor sales and the insurance coverage applies whether or not there is a liquor license; requiring your chapter to secure a copy of the venue’s liquor license is not necessary. We see this as an administrative burden for your chapters.
MJ would generally not have an opinion on whether you require your chapter to get a copy of the venue’s liquor license; however, we have encountered significant confusion, coming from the requirement of copies of both the liquor license and proof of the venue’s insurance coverage for liquor liability coverage. While there is full agreement that evidence of the venue’s insurance coverage is far more important than the liquor license, the chapter officer confuses the two and only gets a copy of the liquor license which is in plain view at the establishment. They think that this satisfies the requirement for the liquor liability coverage verification.
Therefore, with the unnecessary administrative burden and the confusion that exists with the collegiate members regarding the differences between the two documents, we don’t think that the requirement is beneficial or necessary.