CG 00 33 AND CG 00 34–LIQUOR
LIABILITY COVERAGE FORMS ANALYSIS
(November 2025)
Liquor liability responds to the
vicarious responsibility of entities serving alcohol for injuries or damages
caused by intoxicated individuals. Liability rules differ by state and are
based on dram shop, liquor control, or alcoholic beverage laws. While the laws
vary, most states hold the owner of a liquor or alcohol business liable for
injuries or damages caused by an intoxicated individual if the provider
contributed to the person's intoxication.
There
are two ISO Liquor Liability Coverage Forms available to provide the necessary
coverage. The first is the CG 00 33, which is an Occurrence Coverage Form. It
covers liability or damage losses that occur during the policy period,
regardless of when the insurance company is notified. The key part of this
coverage is the date the loss occurs.
The
second is the CG 00 34, which is a Claims-Made Coverage Form. It is triggered
by the actual filing date or receipt of the claim, not just the date of the
loss or injury. This coverage applies to any loss or claim reported during the
policy period, regardless of when the incident occurred, as long as it falls
after the retroactive date specified in the declarations. While the retroactive
date can be set to any date, for maximum coverage, it should be the first date
when claims-made coverage began to apply. Selecting a later date might create a
coverage gap because an occurrence-based policy covers losses before that date,
whereas claims-made coverage only covers incidents occurring after the
retroactive date.
Related
Article: Compare: ISO Commercial General Liability Coverage Forms: CG
00 01 (Occurrence Basis) to CG 00 02 (Claims-Made Basis)
The CG
00 33–Liquor Liability Coverage Form–Occurrence Basis is analyzed first. It is
then followed by a summary of CG 00 34–Liquor Liability Coverage
Form–Claims-Made Basis, highlighting only the differences between the two.
This
analysis pertains to the 04 13 edition of these coverage forms. Changes from
the 12 07 edition are highlighted in bold.
Related Court Case: Liquor Liability
Exclusion Held to Overcome Coverage for Car Parking
CG 00 33 begins by stating that
certain provisions limit coverage. It advises the insured to thoroughly review
the coverage form to understand their rights and responsibilities, as well as
to identify what is included and excluded.
This section also clarifies that the
terms “you” and “your” refer to the named insured and that an insured can be
any individual or entity qualifying under Section II–Who Is an Insured. It also
states that "we," "us," and "our" refer to the
insurance company providing the coverage.
Additionally, terms and phrases
in the policy enclosed in quotation marks have specific meanings, making it
crucial to consult Section V–Definitions to fully understand the CG 00 33.
The insurance company's right and
duty to defend ends when the coverage limits are exhausted by paying judgments
and settlements. The insurance company has no additional obligations to pay or
perform any acts or services beyond those specified in Supplementary Payments.
·
During the
policy period.
·
Within the
coverage territory.
·
After the
retroactive date, if one is indicated on the declarations.
·
Before the
policy expiration.
·
If the
injury is not a reoccurrence of a prior incident from a previous policy period,
and neither the insured under paragraph 1 nor any other authorized employees
were aware of that prior injury.
·
During the policy period and any continuation,
change, or resumption related to that injury after the policy period ends.
·
When an
insured or one of its authorized employees receives a claim notice.
·
Claim notice
is reported to the insurance company.
·
A settlement
is reached as outlined in paragraph a. above.
·
A claim is
known through any means that an injury has occurred or is occurring.
All damage claims related to injury to
the same individual or organization, such as claims for care, lost services, or
death resulting from the injury, are considered made when the initial claim is
filed against any insured.
|
Example:
Jack’s Bar and Grill recently opened
and purchased a Commercial General Liability Coverage Form (CG 00 01) to
insure its business. They delayed buying liquor liability coverage until they
could afford it. Two days before the liquor coverage started, an incident
happened: a bartender served alcohol to Joe, who was clearly intoxicated. Joe
fell on his way out, hit his head, and was seriously injured. Joe sued Jack’s for his medical expenses, claiming
the bartender served him while he was visibly intoxicated. Jack’s CG 00 01
policy did not respond due to its liquor liability exclusion. Additionally, Jack’s
CG 00 33 denied the claim because the incident happened before the policy’s
start date. |
NOTE: The chart below shows that CG 00
33 only provides liquor liability coverage. It is an addition to CG 00 01but does
not replace it. It fills a gap in CG 00 01.
|
Type of Liability |
Covered by CG 00 01? |
Covered by CG 00 33? |
|
Premises Liability |
Yes |
No |
|
Products Liability |
Yes |
No |
|
Completed Operations Liability |
Yes |
No |
|
Personal Injury Liability |
Yes |
No |
|
Liquor Liability |
No (if in the liquor business) |
Yes |
Related Court Cases:
Liquor Liability
Exclusion Held Applicable to Nonprofit VFW Post
Liquor Liability Suit
Based on Failure to Restrain Patron Did Not Circumvent Exclusion
This insurance coverage does not
apply to any of the following, except as noted:
Coverage does not apply to injury that is
expected or intended by the insured. However, there is an exception for bodily
injuries caused when the insured uses reasonable force to protect people or
property.
|
Example: Amy owns the Li'l Drinkin' Shack and hires Fred as
the bouncer. Patrick, a heavily intoxicated customer, tries to attack Jeri,
another patron. Fred steps in to protect Jeri, but accidentally worsens the
injury. Jeri’s family sues Li’l Drinkin' Shack for Jeri’s injuries. Coverage
is applicable since Fred was trying to protect Jeri from Patrick. |
Note: The primary reason for this
exclusion is to prevent the insurance company from becoming involved in
non-accidental losses, which serves the public interest. It ensures the insured
will not use the insurance coverage for gain, such as in cases of theft, to
harm a competitor, seek revenge, or cause any other intentional damage. The
wording of this exclusion continues to be challenged and interpreted by courts.
ISO currently does not offer an endorsement to buy back this coverage or to
remove this exclusion.
Related Article: Expected or Intended
Injury Exclusion
Coverage does not
include any obligations of the insured under laws such as workers compensation,
disability benefits, unemployment benefits, or similar regulations.
|
Example:
Joe’s Micro Brewery often invites its employees to help test new beers.
During one of these events, Sue and several other servers participate.
Unfortunately, Sue drinks a bit too much and slips while trying to stand up,
resulting in serious injuries to her right leg and cuts to her face. Although
she receives workers compensation benefits, Sue is seeking additional
compensation and decides to sue Joe’s. However, her claim is denied under the
CG 00 33 due to an exclusion in coverage. |
NOTE: The purpose of this exclusion and
the Employer’s Liability exclusion is to prevent CG 00 33 from indemnifying the
insured for injuries covered by workers compensation or employer’s liability
policies.
Bodily injury to an insured employee caused
by their employment or work duties is not covered. Injuries to the employee’s
spouse, children, parents, or siblings caused by that injury are also excluded.
This exclusion applies whether the insured is acting as an employer or in
another capacity, or if the insured is required to share or reimburse damages
paid by others due to the injury.
|
Example: Building
on the previous example, Sue's husband, Jim, takes a different approach
regarding her injuries. He decides to sue Joe's Micro Brewery for the
family's lost income and the costs of childcare during Sue's rehabilitation.
However, similar to the earlier situation, there is no coverage. |
|
Example: Crystal was working as a temporary server at Joe's
on the night of Sue's accident. She was hired through an employment agency.
When Sue began to fall, she grabbed Crystal, who was also intoxicated,
causing both of them to fall. When Crystal decided to sue Joe's, she found
that coverage was not available because she was already covered under the
workers compensation policy of the employment agency. |
Coverage does not cover injuries
caused by selling, serving, or supplying alcoholic beverages if the appropriate
liquor license is not active.
NOTE: This exclusion aligns with other
coverage forms because offering alcoholic beverages without a license is
illegal, and insurance does not cover illegal activities.
Previous editions of CG 00 33
only required that a liquor license be expired, suspended, canceled, or
revoked. The goal was to deny coverage when a license was required but not
active. Although the earlier language was ambiguous, this new wording clarifies
the intent.
|
Example: The
state liquor board has suspended Jack's Bar and Grill's liquor license due to
multiple incidents of selling alcohol to minors. Despite this suspension,
Jack's continues to operate without a valid license. One night, a minor is
served alcohol, becomes intoxicated, and causes an injury. The minor's
parents decide to sue Jack's. However, their claim is denied because the
incident occurred while Jack's did not have a valid liquor license. |
Coverage does not extend to
injuries caused by the insured's product. However, there is an exception: this
exclusion does not apply to injuries for which the insured or an insured's
indemnitee may be held liable, due to any of the following reasons.
·
Causing or
contributing to any person's intoxication
·
Providing
alcoholic beverages to minors or individuals already intoxicated.
·
Any law
regulating the sale, distribution, gifting, or consumption of alcoholic
beverages.
|
Examples:
|
This coverage does not apply if
other insurance is available to cover any injury, even if the limits of that
other insurance are exhausted. The only exception is when that other insurance
covers liability imposed on the insured due to any act of providing alcoholic
beverages.
Coverage does not apply to bodily
injury or property damage caused directly or indirectly by war, undeclared war,
or civil war. It includes government measures to prevent or defend against
expected or actual attacks by governments or authorities using military
personnel or agents, and warlike actions by military forces. It also includes
rebellion, revolution, insurrection, unlawful seizure of power, and government
actions to prevent or counter these events.
The Insuring Agreement above
outlines the insurance company’s responsibilities and clarifies that it has no
duties beyond providing Supplementary Payments. The insurance company only
issues these payments when investigating or settling claims or defending suits
brought against an insured. These payments do not decrease the insurance
limits.
1. If named or designated as an
insured on the declarations as follows:
The individual and the
individual's spouse are insureds.
|
Example: Joe Johnson owns Joe’s Microbrewery as an
individual. Both Joe and his wife are insureds. Joe also owns a separate sole
proprietorship individually, where he brews small quantities of beer. Both
Joe and his wife are also insureds for that operation. However, Joe is also
involved in a dance club he and his brother own as a partnership. In this
case, the partnership is not included as an insured. |
The named insured is an insured. The
insured’s members, partners, and their spouses are also insureds, but only when
they are conducting the named insured’s business.
|
Example: In the example above, if Joe makes his brother a
partner in Joe’s Microbrewery, both the partners and their spouses are
covered for their duties as partners in the business. However, there is no
coverage for the sole proprietorships or for any other partnerships involving
either of these partners. |
The limited liability company is
an insured. Members of the company are insureds, but only when they are
conducting the named insured’s business. The named insured's managers are also
insureds, but only with respect to their duties as managers.
That organization is an insured.
Executive officers and directors are insureds, but only in relation to their
duties as such. Stockholders are also insureds, but only for the liability they
have as stockholders.
The
trust is an insured. The named insured’s trustees are also insureds, but this
is limited to only their duties as trustees of the trust.
2. The following are also insureds:
The named insured's
employees are considered insureds. This does not include executive officers of
an organization or managers of a limited liability company. However, employees
are only considered insureds for acts within the scope of their duties related
to the insured’s business.
No employee is an
insured for any of the following injuries:
·
To
the named insured, its partners, or members.
·
To
a co-employee during the course of their employment or while performing duties
related to the named insured's business.
|
Example: Shari and Emma work at Joe's
Microbrewery. Shari had a rough night, so Emma offered her some liquid
comfort. When Shari was on her way home from work, she was involved in an
accident. Shari
sued Joe’s because the
alcohol was provided by them, and she also sued Emma because she served her
the alcohol. Since Emma is a co-employee, she is not insured for this action.
Removing this action against Emma keeps this type of injury within the scope
of Workers Compensation, Employers Liability, or a similar coverage. |
·
To a
designated relative of that co-employee as a consequence of
the paragraph above.
|
Example: Continuing the example above,
Shari’s injuries are so serious that she dies. Shari’s family files a claim against Emma and
Joe’s for their emotional distress as a result of their loss. Emma is not an
insured, and the claim against her is denied. The claim against Joe’s is also
not covered, but that is under the exclusion section. |
·
Where there
is an obligation to share damages with or to repay another party that must pay
damages because of the injury described in the paragraphs above. This works
with the Employers Liability exclusion to prevent such actions from being
covered.
·
No employee
is an insured for property damage to property owned, occupied, rented, or
loaned to them, any other employee, or a partner or member of a partnership,
joint venture, or limited liability company.
Any party holding proper
temporary legal custody of a deceased named insured's property is covered.
However, this coverage is limited to liability resulting from maintaining or
using the property and only until a proper legal representative is appointed.
A properly appointed legal
representative has all the rights and duties of the named insured if the
insured dies. However, this is limited to their duties as a properly appointed
legal representative.
Any organization that the named
insured has newly formed or acquired, and in which they own or hold the
majority interest, is considered a named insured if it does not have other
insurance. Coverage for this organization ends 90 days after its formation or
acquisition, or at the end of the policy period, whichever comes first. This
coverage does not extend to injuries that took place before the organization
was formed or acquired by the named insured.
However, newly formed or acquired
partnerships, joint ventures, or limited liability companies are excluded.
NOTE: ISO has introduced an endorsement
to offer this coverage to newly formed or acquired limited liability companies.
Related Article: Liquor Liability
Coverage Forms Available Endorsements and Their Uses
No individual or organization is
considered an insured regarding the conduct of any current or past partnership,
joint venture, or limited liability company unless they are listed as an
insured on the declarations.
1. The most the insurance company
pays is the limits of insurance shown on the declarations. This is subject to
the rules outlined below and regardless of the number of insureds, claims made,
suits brought, or number of parties that make claims or bring suits.
|
Example:
Joe Johnson has CG 00 33. The named
insured on the declarations is Joe Johnson and Joan Johnson d/b/a Joe’s
Microbrewery and Joe’s Bar. An injury to a customer results in a lawsuit. The
lawsuit claiming damages names the two owners, Joe and Joan. Coverage applies
to both Joe and Joan, but the limits are shared and not separate for each. |
2.
The
most the insurance company pays for the total of all injury resulting from selling,
serving, or providing alcoholic beverages is the Aggregate Limit shown on the
declarations.
NOTE: Coverage ends when this limit is exhausted
by paying or settling claims and judgments during the policy period.
|
Example: Joe's Liquor Liability Coverage has a limit of
$200,000 for each common cause and a total aggregate limit of $1,000,000. The
coverage begins on 01/10/2025, and the losses incurred so far this year are
as follows: |
|
|
Date of Loss |
Amount of Loss |
|
02/05/2025 |
$195,000 |
|
04/02/2025 |
$84,000 |
|
06/22/2025 |
$200,000 |
|
07/11/2025 |
$71,000 |
|
07/28/2025 |
$141,500 |
|
08/17/2025 |
$178,000 |
|
10/30/2025 |
$130,500 |
|
Total Losses |
$1,000,000 |
|
A claim of $200,000 for a loss on 11/13/2025 is
denied because the total policy limit has been reached through previous
claims within the current policy period. |
|
3. Each Common Cause Limit
represents the maximum amount the insurance company will pay for all injuries
to a single individual resulting from the sale, service, or provision of
alcohol to one or more persons or organizations. This
limit is subject to the Aggregate Limit.
|
Example: Mavis, Ann, and Shirley
each buy a bottle of wine at the Findley Bar and Package Store. They spend
the afternoon together at a park, drink the wine, and then drive home. All
three are injured in accidents. Their parents sue Findley because all three
are under the legal drinking age. Each purchased her own bottle of wine. As a
result, the Each Common Cause Limit is available for each suit, subject to
the Aggregate Limit. |
Related Court Case: Teen Tragedy: Was Each
Drink an Occurrence?
The last paragraph of this explains how the
insurance limits are applied. They are considered separately for each
consecutive annual period and any remaining period shorter than 12 months. This
begins from the policy effective date listed on the declarations, unless an
extension is issued for any additional period of less than 12 months. If
extended, the additional period is considered part of the immediately preceding
period for determining the insurance limits.
|
Example:
The original 12-month policy period was
from June 1 to June 1. During the second policy period, the insured requested
an extension of the policy period to align with its accounting year. ·
The coverage
limits apply separately to the first annual policy period, which runs from
June 1 to June 1. ·
They also apply
separately to the second policy period, which was extended for an additional
six months, changing the expiration date from June 1 to the new January 1
date. ·
After this
extension, a new 12-month annual period from January 1 to January 1 is
established, with its own set of limits. If a short-term policy had been issued instead of
the six-month extension, it would have had its own limits. However, since the
original policy period was extended, the original limits applied to both the
initial period and the extension period. |
The insurance company remains
obligated even if the insured or their estate declares bankruptcy or becomes
insolvent.
The
named insured has several responsibilities to fulfill if a claim or demand for
coverage arises.
·
How, when, and where the event took place.
·
Names and addresses of all injured parties and any witnesses.
·
Describe the nature and location of the injury.
·
Immediately record its details and the date it was received.
·
Notify the insurance company.
·
Provide the insurance company with written notice of the claim or suit.
NOTE: “As soon as practicable” is used
in place of “as soon as possible” or immediately. This term means the named
insured has some time to act, but their actions should still be timely.
Related
Court Cases:
Does Untimely Notice Bar Recovery?
Late Notice Exclusion Requires "Prejudice"
·
Immediately send the insurance company copies of demands, notices,
summonses, and legal documents related to the claim or lawsuit.
·
Authorize and permit the insurance company to access records and other
necessary information.
·
Cooperate with the insurance company as it investigates, settles the
claim, or defends against the lawsuit.
·
Upon request, assist the insurance company in exercising any rights
against individuals or organizations that may be liable to the insured for
injury or damage covered by this policy.
NOTE:
The wording of this condition appears to conflict with Exclusion. f. Other
Insurance described above.
The insurance company's
obligation to pay is limited when there is other valid and collectible
insurance covering a loss, as follows:
This insurance will be primary, and the
insurer's obligations remain unaffected unless there is other applicable
primary insurance. If so, it shares the responsibility as described under
Method of Sharing.
|
Example:
Mairum’s Clothing hosted a fashion show at its store one
afternoon, inviting select customers to view its latest imported merchandise
lines. Light appetizers, wine, tea, and coffee were served. Marium’s
purchased a liquor license and a single event liquor liability policy due to
local regulations. After the event, a young woman under 21, who
attended the fashion show, was involved in an automobile accident. She was
found to have a blood alcohol content of more than twice the legal limit, and
she lacked auto insurance. The legal case ultimately named Mairum’s for
serving liquor to a minor during the fashion show. Both Mairum's CG 00 33 and CG 00 01 responded.
Since both are ISO primary coverage forms, the Method of Sharing was used,
with each insurer responsible for 50% of the claim until reaching their
policy limits. |
If the other insurance permits
contribution by equal shares, this insurance does as well. Each insurance
company contributes equal amounts until its limit of insurance is exhausted or
the loss is paid, whichever occurs first.
If the other insurance does not
include contribution by equal shares, contribution is by limits. Under
contribution by limits, the contribution is proportioned based on a developed
ratio. Ratios are determined by dividing each insurance company's limit by the
total limits available. The loss is then apportioned between the various
policies based on that ratio.
Other insurance can be complex
and may lead to legal disputes.
Related Court Case: Other Insurance
Clauses Do Not Cancel Each Other Out
The date on the billing notice is
when the company expects to receive the billed premium. However, if the advance
and audit premiums exceed the earned premium, the insurance company refunds the
excess to the first named insured.
NOTE: The audit period is not clearly
defined or explained. It can be monthly, quarterly, annually, or any reasonable
period agreed upon by the first named insured and the insurance company.
|
Example:
The policy
term runs from January 1 to January 1 and undergoes a quarterly audit. The
deposit premium is estimated to be close to the final earned premium for the
policy period. After each quarter, an
audit determines that quarter’s exposures. The insurance company calculates
the earned premium based on this audit, subtracts it from the deposit
premium, and provides the first named insured with a statement detailing the
quarterly calculations. If the earned premium is
higher than the deposit premium, the company issues a bill for the
difference, which the first named insured is responsible for paying by the
due date. |
NOTE: ISO has introduced CG 99 09–Premium Audit
Noncompliance Charge. This optional form results in a charge being assessed
against named insureds who fail to respond to audit information requests.
Related Article: Liquor Liability
Coverage Forms Available Endorsements and Their Uses
By accepting the policy as
issued, the named insured confirms the statements on the declarations are
complete and accurate. The named insured also agrees these statements are based
on their representations to the insurance company and that the policy is issued
in reliance on those representations.
NOTE: This condition is used to void coverage and prevent
the named insured from arguing after a loss that the Declarations was issued in
error.
Related Court Cases:
Contractor Paints Itself into a
Corner
Except for the insurance limits
and rights specific to the first named insured, the coverage is regarded as if
each named insured were the only insured. It also applies individually to each
insured against whom a claim is filed or a lawsuit is initiated.
8. Transfer of Rights of Recovery Against
Others to Us
Any rights the insured has to
recover all or part of any payment made by the insurance company are
transferred to the insurance company. The insured must preserve those rights
and avoid actions after the loss that could harm them. The company may request
the insured to pursue legal action or transfer these rights to it and help
enforce them.
Related Court Case:Trash Talking:
Subrogation Waiver Debated
9. When We Do Not Renew
If the insurance company chooses
not to renew the policy, it must mail or deliver written notice of this
decision to the first named insured listed on the declarations at least 30 days
before the expiration date. If the notice is mailed, proof of mailing serves as
sufficient proof of notice.
NOTE: This paragraph is modified by specific endorsements
in many states regarding the required number of days for advance notice of
non-renewal, what constitutes acceptable proof of mailing, and valid reasons
for terminating or not renewing coverage. Each state’s requirements should be
carefully reviewed when considering changes to this condition.
Defined words are used throughout
the coverage form. Restricting their meaning to these definitions helps
everyone better understand the coverage intended.
NOTE: The Editors added titles to enhance clarity.
This is
bodily injury, disability, sickness, or disease a person sustains. Death from
these is also considered bodily injury, regardless of when it occurs.
This includes all of the
following:
This
expanded territory applies only when the insured's obligation to pay damages is
established in a lawsuit based on the merits within the territory specified in
the first bullet above, or if a settlement is reached with the insurance
company's approval.
This term includes leased workers
but excludes temporary workers.
This refers to a person holding
any officer role specified in the insured's charter, constitution, by-laws, or
similar foundational documents.
This is an individual
leased to the named insured by a labor leasing company. There must be an
agreement between the named insured and the leasing company, and the tasks
assigned to the leased worker must be related to the operation of the named
insured's business. Temporary workers are not considered leased workers.
In liquor liability coverage, the
term “injury” replaces “occurrence.” Without injury, there is no coverage.
Therefore, it is a very important term. In this coverage form, injury refers to
damages.
The damages considered are only those caused
by bodily injury or property damage. Care, loss of services, and loss of
support are included within these categories.
|
Example: Frank orders numerous beers from his waitress,
Mavis, throughout the evening. He becomes heavily intoxicated, and during
this state, he does the following: |
||
|
Action |
BI or
PD |
Injury |
|
Proposes marriage to the Mavis |
No |
No |
|
Antagonizes Mavis’ husband, Lonnie |
No |
No |
|
Stumbles over a table and falls on Lonnie |
Yes |
Yes |
|
Signs a contract giving his car to Mavis |
No |
No |
|
Falls in front of an oncoming bus |
Yes |
Yes |
Property damage refers to
physical injury to tangible property, including the resulting loss of use
caused by that damage. It also encompasses the loss of use of tangible
property, even if no physical harm has occurred. The loss of use is considered
to occur at the time of the injury or event making the property unusable.
This is a civil proceeding
alleging damages for bodily injury, property damage, or personal and
advertising injury covered by the policy. Arbitration and other alternative
dispute resolution proceedings claiming such damages are also considered
lawsuits, as long as the insurance company agrees.
There are two types of temporary
workers. One is provided to replace a permanent employee who is only
temporarily away. The other is for seasonal or short-term needs.
Related Court Case: Leased Worker
Considered a Temporary Employee
Includes the following:
NOTE: Real property is never
considered “your product.”
NOTE: Vehicles are never considered
containers.
However, vending machines or
other property rented to others or placed at other locations for their use, but
not sold, are not considered “your product.”
This
analysis focuses only on the parts of the claims-made coverage form that differ
from the occurrence coverage form. These differences are outlined in the
following sections:
o
Insuring
Agreement
o
Duties In
The Event of Occurrence, Offense, Claim, or Suit
o
Other
Insurance–Excess Insurance
o
Your Right
to Claim and Occurrence Information
NOTE: The WHO, WHAT, WHERE, and HOW
aspects of coverage are unchanged. All differences are based on WHEN.
Paragraphs
b. and c. replace paragraphs b., c., and d in CO 00 33.
·
The injury
is caused by an event occurring within the covered area.
·
The injury
neither occurred before any retroactive date listed on the declarations nor
after the policy period ended.
·
A claim for
damages is first made against any insured during the policy period or any
extended reporting period provided
·
When the
notice of claim is first received and recorded by any insured
or the insurance company; or,
·
When the
insurance company reaches a settlement per paragraph a.
All claims for damages due to injury to the
same person, including that person's death, are considered to have been made at
the time the first of these claims was made against any insured.
|
Example:
On 3/1/2025, Angelo, a delivery worker,
was struck by a car driven by Leona. Leona had spent many hours drinking at the
insured’s establishment, Cruisin’ In. As a result of the crash, Angelo
sustained serious injuries. ·
On 9/1/2025,
Cruisin’ In receives its first notice of the incident when a claim for
Angelo’s medical expenses is submitted. ·
On 2/15/2025,
Angelo’s wife files a claim for loss of consortium. ·
On 5/18/2027,
Angelo dies. His family subsequently files a wrongful death claim against the
insured. ·
On 12/01/2027,
Angelo’s workers' compensation carrier subrogates against the insured for the
costs of the injuries it paid. Each claim is assigned an initial claims-made date
of 09/01/2025. |
Only the lead language for item
b. has been changed. Under the Claims-made basis, it refers to a claim being
received, whereas on the occurrence basis, it refers to a claim being made or a
suit being filed.
Subparagraph b. is Excess
Insurance, while this is Method of Sharing in the occurrence policy.
Rather than sharing in a loss,
this section states the insurance is excess over any other insurance coverage
if it is written on any basis other than claims-made and is effective before
this coverage's effective date. However, this applies only if either of the
following conditions is met:
This basically means that if
claims-made coverage replaces occurrence coverage, the occurrence coverage form
is primary, while the claims-made coverage form is excess when coverage
overlaps due to the retroactive date.
NOTE: This
condition in the claims-made coverage form is not present in the occurrence
coverage form. It specifies the claims-made claim information that the
insurance company must release for all periods during which coverage was
provided on that basis, the parties to whom it must release this information,
and the conditions under which it must do so. The detailed analysis follows.
The
insurance company will provide information to the first named insured related
to any claims-made liquor liability coverage it issued in the current period
and the past three year period. The required information includes:
Reserve
amounts are determined by the insurance company's judgment. They can change at
any time without notice and should not be regarded as final settlement amounts.
NOTE: It is
essential to understand the reserve information must
not be shared with any claimant or their representative without prior approval
from the insurance company.
If the
insurance company chooses to cancel or not renew the policy, it provides this
claim information at least 30 days before the cancellation or non-renewal date.
Otherwise, it only provides this information after the first named insured
requests it in writing. The company will respond only if it receives the
request within 60 days after the policy's expiration date and will deliver the
information within 45 days of receiving the request.
The
insurance company carefully collects and maintains claim and occurrence
information for its own business use. It does not provide any warranties or
representations regarding its accuracy to any party. Cancellation or
non-renewal remains effective even if the information provided is not accurate.
This
section applies only to the claims-made coverage form. It details the extended
reporting periods and terms available if the coverage is canceled, not renewed,
or replaced by a policy with a retroactive date later than the one specified on
the coverage form. It also covers scenarios where coverage is renewed on a
basis other than claims-made.
This
section also explains how the insurance limits apply and how the premium for
the extended reporting period is calculated. The detailed analysis follows.
1.
The insurance company provides one or more
described Extended Reporting Periods if any of the following apply:
·
Coverage is cancelled or not renewed.
·
The insurance company renews or replaces coverage with claims-made
insurance, but the retroactive date is changed to a later date than listed on
the declarations.
·
The insurance company renews with coverage other than on a claims-made
basis.
NOTE: The extended reporting period does not apply when
the named insured requests a change to the retroactive date or if coverage on a
different basis replaces claims-made coverage.
2.
Extended Reporting Periods do not change the nature
of the coverage or extend the coverage period. They only apply to claims for
injuries occurring before the coverage period ends and after any retroactive
date specified on the declarations.
3.
A Basic Extended Reporting Period is automatically
included at no additional charge. It begins after the coverage period ends and
continues as follows:
This
period does not apply to claims covered under any subsequent insurance the
named insured purchases or would have been covered if the limit of insurance
had not been exhausted.
4.
The Limits of Insurance are not reinstated or
extended under the Basic Extended Reporting.
5.
A Supplemental Extended Reporting Period is
available through endorsement for an additional premium. Its duration is
unlimited and starts after the Basic Extended Reporting Period ends.
The
named insured must submit a written request for this endorsement within 60 days
after the policy period ends. This coverage does not become effective unless
the named insured pays the additional premium by the due date.
The
insurance company determines the additional premium based on its specific rules
and rates, taking the following factors into account:
·
nature of the exposures
·
previous types and limits of insurance
·
remaining insurance limits for future damages
·
other relevant factors
In any
case, the additional premium will not exceed 200% of the annual premium for
this coverage.
The
endorsement sets out the terms governing the Supplemental Extended Reporting
Period in accordance with this section. It will include a clause indicating the
coverage for claims first received during this period is excess over any other
valid and collectible insurance in force after the start of the Supplemental
Extended Reporting Period.
6.
The insurance company provides the supplemental
aggregate insurance limit as specified in the supplemental aggregate limits of
insurance, but only if the Supplemental Extended Reporting Period is in effect.
This limit is applicable only for claims first received and recorded during the
Supplemental Extended Reporting Period and is equal to the dollar amount shown
on the declarations in effect at the end of the policy period for the aggregate
amount entered.
Section III – Limits of Insurance – paragraph 2 is revised
accordingly. The Each Common Cause Limit specified in the Declarations will
continue to apply, as described in the same section under paragraph 3.
NOTE: Once the Supplemental Extended Reporting Period has
been requested and the premium paid, neither party can cancel it.