Building Owner and Liquor Liability Coverage

March 24, 2014

If an insured restaurant serves liquor, the standard ISO General Liability policy CG 00 01 excludes liquor liability coverage since the named insured (“you”) are in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages.

If the building owner is added to the CG 00 01 as an additional insured using CG 20 11 or CG 20 26, would the owner have liquor liability coverage since they are NOT in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages?

Since the exclusion only applies to the named insured, I would like to know if the building owner as additional insured is granted coverage that the named insured would not have in this GL policy.

Illinois Subscriber

Previous editions of the liquor liability exclusion did exclude coverage for owners or lessors of premises used by others for purposes of liquor businesses. Now, in the current edition of the CGL form, owners or lessors of premises are covered. The exclusion definitely applies only if the named insured is in the business of manufacturing, distributing, selling, serving, or furnishing alcoholic beverages. The building owner does not fit this description.

The bottom line is that owners or lessors of premises are now covered when they are not engaged in the liquor business. The building owner or lessor has coverage for its premises exposures and if the owner or lessor has no part in the manufacturing or selling or serving or furnishing of liquor, there is no reason for the liquor liability exclusion to come into play for the owner or lessor.

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