Liquor Liability Exclusion and Scheduled Exception

May 2, 2011

Liquor liability exclusion endorsement, CG 21 51, is attached to the CGL form of our insured; the insured is a non-profit symphony. The insured is holding a fundraiser that will serve wine. The cost of the fundraiser includes music by the symphony, dinner and beverage. Wine is served by the non-profit (not a separate caterer) and included in the price. No license is required from Pennsylvania , as far as the insured is aware. In the absence of listing the event in the schedule on CG 21 51, does the insured have coverage for this liquor liability exposure?

Pennsylvania Subscriber

If your insured has CG 21 51 on its CGL form, it is recommended that the specific activity be described on the endorsement so that the liquor liability exclusion does not apply to the described event. CG 21 51 states that the liquor liability exclusion applies if the named insured sells or distributes alcoholic beverages, or furnishes alcoholic beverages for a charge. Based on your description of the event, this fits the named insured non-profit.

This endorsement is actually stricter than the liquor liability exclusion on the CGL form in that that exclusion requires the insured to be in the business of manufacturing, distributing, selling, or serving alcoholic beverages, while the endorsement applies to an insured that merely sells or distributes the alcohol and does not require the insured to be in the business of doing that. So, since the non-profit here is not in the business of selling or distributing alcohol, you can use CG 21 51, but fill in the schedule so that the exception to the exclusion can be applied.

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