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Do you sponsor corporate functions, holiday parties, meetings or other social events where alcoholic beverages are served? Do you rent to tenants who sell or serve alcohol? If so, you need to be aware of liquor liability exposures and the extent of coverage provided by your insurance for claims related to selling, serving or furnishing alcoholic beverages.

liquor liabilityA Commercial General Liability (CGL) policy contains language that excludes liquor liability coverage if your company or organization is in the business of manufacturing, distributing, selling, serving, or furnishing alcoholic beverages. However, if your business doesn’t involve alcoholic beverages, a CGL policy provides Host Liquor Liability coverage for an organization or person for certain events or functions that are incidental to the named insured’s business.

If a guest or employee at a company sponsored event overindulges and injures others (nonemployees) due to their intoxication, an unendorsed CGL will protect the insured from claims made by persons injured by the over served employee or guest.

Keep in mind that if you are selling liquor by the drink or charging an admission for an event, it can create a situation where coverage is excluded under a CGL, which would require separate coverage for your protection.

A landlord that has a tenant whose business involves alcoholic beverages needs to be sure that they are protected. In some states, the landlord can be held liable for actions of a tenant.  While naming a landlord on a CGL, as a form of indemnification, is often part of a commercial lease, a CGL will not provide liquor liability protection for a landlord due to the exclusion. The landlord would want to be named on a liquor liability policy.

Does hiring a bartender eliminate liability?

Hiring a professional bartender, who is trained to recognize and handle circumstances of intoxication, can reduce your risk. It does not, however, necessarily absolve you of all potential liability, and lawyers tend to sue all possible parties if an incident occurs. Having a bartender at least establishes someone else as being primarily responsible.  It may also help in defending a claim and can potentially reduce damages you might have to pay. Prior to an event, be sure to obtain a Certificate of Insurance from the bartender to be sure that he/she has adequate liquor liability coverage.

Certain types of events may have other types of increased liability depending on the circumstances. Our Associates can help you determine if you need to purchase special coverage and identify ways to reduce potential lawsuits. You may also want to discuss concerns with your legal counsel. Some businesses find it easiest and safest to prohibit drinking during business hours, including business lunches, dinners and other company events.

Other articles:

7 Steps to Limiting Liquor Liability

How to create a drug and alcohol policy

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The information provided in these articles are only general descriptions and should not be relied upon as complete, correct or accurate for your specific situation. All coverage informaiton is subject to policy provisions, endorsements and may be  subject to your meeting underwriting qualifications. Murphy Insurance Agency is not engaged in rendering legal, accounting or other noninsurance professional services. Consult an appropriate professional for advice regarding your own situation.