INTRODUCTION

The Insurance Services Office (ISO) CG 00 01–Commercial General Liability Coverage Form does not cover bodily injury or property damage for which the insured is legally liable due to:

Causing or contributing to any person's intoxication.
Furnishing alcoholic beverages to persons under the legal drinking age.
Furnishing alcoholic beverages to persons already under the influence of alcohol.
Any law or regulation that pertains to selling, distributing, providing, or using alcoholic beverages.

However, the exclusion only applies to businesses that manufacture, distribute, sell, serve, or furnish alcoholic beverages. All other businesses not involved in these activities are covered under certain circumstances. The legal liability for the insured varies by state and is derived from various dram shop, liquor control, or alcoholic beverage laws. Although these laws differ, most states hold liquor or alcoholic beverage business owners responsible for injuries or damages caused by an intoxicated person or someone "under the influence” if their liquor provider caused or contributed to the intoxication.

Businesses engaged in liquor and alcoholic beverage operations need proper insurance coverage. To ensure adequate protection, either of the following ISO Liquor Liability Forms can be used:

CG 00 33—Liquor Liability Coverage Form – Occurrence Coverage
CG 00 34—Liquor Liability Coverage Form – Claims-Made Coverage

ELIGIBILITY

There are no restrictions on who can purchase liquor liability coverage. While businesses that manufacture, distribute, sell, serve, or provide alcoholic beverages are the main purchasers of this coverage, any business can qualify. This means that there are no ISO eligibility standards. However, individual insurance companies will establish their own criteria.

COVERAGE

The insurance company agrees to pay damages the insured is legally required to pay due to liquor-related injuries covered by the policy. The liability must result from injury caused by a person to whom the insured sold, served, or furnished alcoholic beverages. The insurance company also defends against any lawsuit seeking damages, provided the coverage applies to the damages claimed.

POLICY COMPOSITION

The Liquor Liability Policy includes the following forms:

IL DS 00–Common Policy Declarations
IL 00 17–Common Policy Conditions

This form contains the conditions common to most commercial insurance coverage forms and policies. It is a mandatory form for most monoline or multi-line simplified commercial coverage forms and policies.

Related Article: IL 00 17–Common Policy Conditions Analysis

CG DS 03–Liquor Liability Declarations

Related Article: Liquor Liability Declarations

CG 00 33 or CG 00 34–Liquor Liability Coverage Forms

IL 00 21–Broad Form Nuclear Exclusion

Policy Cover or Jacket

Each insurance company creates this document tailored to its specific purposes and use. It might contain a table of contents or an index to assist customers or to meet state requirements.

LIQUOR LIABILITY COVERAGE FORM

The ISO Liquor Liability Coverage Forms contain the following sections:

Section I–Liquor Liability Coverage

This section includes the insuring agreement, exclusions, and supplementary payments.

Section II–Who Is an Insured

This section describes the persons or entities insured or that may be insured.

Section III–Limits of Insurance

This section outlines how the insurance limits apply.

Section IV–Liquor Liability Conditions

This section explains the specific conditions associated with this coverage form.

Section V (Section VI in CG 00 34)–Definitions

This section defines certain words that appear throughout the coverage form.

Section V–Extended Reporting Periods (CG 00 34 only)

This section describes how extended reporting periods work within the Claims-Made Coverage Form.

ENDORSEMENTS

The coverage scope of either liquor liability coverage form is fairly limited. As a result, only a limited number of endorsements are compatible with it.

NOTE: ISO has added nine new endorsements with a 12 19 edition date. While all are optional, some insurance carriers might make them mandatory. The brief descriptions can help assess their impact on your client. Additionally, the CG 99 09–Premium Audit Noncompliance Charge may be especially relevant, as the assessed charge could be substantial.

UNDERWRITING

Underwriting liquor liability coverage involves identifying potential exposures, analyzing them based on the level of risk each one presents, classifying the risk, and then rating and pricing these exposures accordingly.

RATING

Rating liquor liability coverage is detailed in Rule 45 within the General Liability Section of the ISO Commercial Lines Manual (CLM). This rule explains the coverage, classifications, liquor liability grades, special rules for the claims-made coverage form, premium calculation guidance, and deductible rules.