Liquor Liability Exclusion Applies to Gift?

If an executive officer buys a bottle of liquor and gives it to a staff member or other employee as a gift, would there be coverage under the host liquor liability exception to the liquor liability exclusion?

Delaware Subscriber

The liquor liability exclusion on the CGL form applies only if the insured is in the business of manufacturing, distributing, selling, serving, or furnishing alcoholic beverages. So, unless this executive officer is in that business, the exclusion would not apply.

However, there is another point that you should consider. Under the terms of the standard CGL form, an executive officer is an insured only with respect to his duties as the named insured's officer. Buying a bottle of liquor as a gift for an employee does not seem to meet this requirement. And that means that the officer is not an insured for the purposes of coverage under the CGL form. In that case, the use of the liquor liability exclusion is not relevant since the liability coverage is for insureds.

 

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