Insurance Law Lesson 34: If Your Business Serves Alcohol…

… You need dram shop coverage.

Your standard CGL excludes coverage for bodily injury and property damage liability for contributing to the intoxication of any person, providing alcohol to a minor or a drunk person, or violation of any law regarding alcohol.

The liquor liability exclusion applies broadly, but only if your business involves making, distributing, or selling alcohol. Having drinks at the company Holiday Party should not trigger this exclusion and allowing another to bring alcohol to your premises is specifically excepted from the liquor liability exclusion.

Many restaurants serve alcohol, and they should have dram shop coverage.

Other restaurants do not sell or serve, but allow patrons to bring alcohol in. These restaurants should be fine with the CGL coverage.

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