Liquor Liability Exclusion Overcomes Coverage for Car Parking

Commercial Liability	Liquor Liability Exclusion
Liquor Liability	No Duty to Defend

Two pedestrians injured outside a pub by an allegedly intoxicated driver sued both the driver and the pub where he drank. They claimed the pub violated the Pennsylvania Dram Shop Act by serving alcohol to a visibly intoxicated person.

When the pub filed a claim under its general liability insurance, the insurer filed a declaratory judgment action to determine that it did not have a duty to defend or indemnify its insured. It argued that it had no defense obligation because of the familiar liquor liability exclusion in the policy.

The insured argued that the injured parties' claims were based on negligence rather than the dram shop act. It contended that the liquor liability exclusion was ambiguous when read together with the automobile exclusion in the policy. Specifically, the exclusion did not apply to "...the parking of an automobile on insured premises if such automobile is not owned by or rented or loaned to any insured."

The court stated that the insured's duty to the injured parties arose solely from selling alcohol to the driver. The liquor liability exclusion in the policy specifically addressed this activity. "The policy clearly and unambiguously excludes coverage of the instant claims."

The insurer's request for summary judgment was approved, indicating it was not obligated to defend or indemnify the insured.

Those Certain Underwriters And Insurers Subscribing To Lloyd's Policy No. SP3/7131, Plaintiffs v. 6091 Frankford Avenue, Incorporated ET AL., Defendants. United States District Court for the Eastern District of Pennsylvania. No. 96-4733. January 16, 1997. CCH 1997 Fire and Casualty Cases, Paragraph 5948.