Liquor Liability Coverage for Catering Clients

Our insured has customers that will purchase liquor for private events. The customers do not purchase the liquor from our insured, but the insured does pour the liquor and provide other bar services. Will the insured's general liability policy provide coverage for claims that may occur from this exposure?

North Dakota Subscriber

The liquor liability exclusion on the standard commercial general liability (CGL) coverage form applies if the named insured is in the business of serving or distributing or selling alcoholic beverages. The way you describe the situation, your insured does serve or distribute alcohol even if he does not sell it, so the exclusion will apply and the CGL form will not provide any coverage for the insured for a bodily injury or property damage claim.

What the insured may want to consider is the liquor liability policy. This policy pays sums that the insured becomes legally obligated to pay as damages because of injury if liability for such injury is imposed on the insured be reason of the selling, serving, or furnishing of any alcoholic beverages. There is an exclusion on the policy for injury arising out of any alcoholic beverage sold, served, or furnished while any required license is not in effect, but if the insured keeps his liquor license up to date, that exclusion will not present a problem.