A carrier added the ISO endorsement CG 24 08 10 93 to the commercial general liability form CG 00 01 04 13 and says that the endorsement adds liquor liability to the policy, as it eliminates the liquor liability exclusion. 

The CGL liquor liability exclusion reads:

c. Liquor Liability 

"Bodily injury" or "property damage" for which any insured may be held liable by reason of:

(1) Causing or contributing to the intoxication of any person;

(2) The furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or

(3) Any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages. 

This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in:

(a) The supervision, hiring, employment, training or monitoring of others by that insured; or

(b) Providing or failing to provide transportation with respect to any person that may be under the influence of alcohol; if the "occurrence" which caused the "bodily injury" or "property damage", involved that which is described in Paragraph (1), (2) or (3) above. 

However, this exclusion applies only if you are in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages. For the purposes of this exclusion, permitting a person to bring alcoholic beverages on your premises, for consumption on your premises, whether or not a fee is charged or a license is required for such activity, is not by itself considered the business of selling, serving or furnishing alcoholic beverages.

The endorsement says:

Exclusion c. – Liquor Liability of COVERAGE A – BODILY INJURY AND PROPERTY DAMAGE LIABILITY (Section I) – Coverages does not apply.

Q: Does the endorsement effectively add liquor liability to the CGL?

Response 1: The intent is simply to remove the liquor liability exclusion from the CGL policy. In the CGL liquor liability exclusion, it is unclear what is meant by "the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages." The endorsement helps to clarify that by removing the liquor liability exclusion. It eliminates the need to purchase a separate liquor liability policy. 

The question is: Under what circumstances would an insurer agree to do so? The most likely situations are with entities that may occasionally serve or sell alcohol, such as nonprofits providing alcohol at a fundraiser. This endorsement is used when the exposure is only incidental. Otherwise, a full liquor policy is usually strongly suggested. 

Response 2: This endorsement completely removes the liquor liability exclusion from the CGL. This is an alternative to providing liquor liability coverage via a separate policy or coverage part. Keep in mind that, by taking this approach, the insured does not have a separate aggregate limit available for liquor-related claims. You may want to consider a higher umbrella limit.

Response 3: I agree with the carrier that there is some liquor liability coverage for the sale and service of alcoholic beverages with this endorsement attached. However, it's still not as broad as coverage under a liquor liability policy. Saying so will trigger an errors & omissions claim.

For more information, read a Rough Notes overview of the two ISO liquor liability forms, “CG 00 33 and CG 00 34–Liquor Liability Coverage Forms Analysis."

An article from Business Law Southwest provides a comparison between the CGL and liquor liability, “General Liability Insurance vs. Liquor Liability."

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