CG 00 33 AND CG 00 34–LIQUOR LIABILITY COVERAGE FORMS ANALYSIS

(November 2019)

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INTRODUCTION

Liquor liability is the vicarious liability of the entity who serves alcohol to a person for damages that the served- person causes. Who has such liability and the extent of the liability varies from state to state and is based on dram shop, liquor control, or alcoholic beverage laws. While the laws are different, most state that the owner of the liquor or alcoholic beverage business can be held liable for injury or damage an intoxicated person causes if the party that provided the liquor caused or contributed to the person's intoxication.

There are two ISO Liquor Liability Coverage Forms that can provide the necessary coverage. CG 00 33 is the Occurrence Coverage Form. It covers liability or damage losses that occur during the policy period, regardless of when the insurance company is notified of the loss or claim. The key to this coverage approach is the date of loss or when the loss occurs.

CG 00 33 is the Claims-Made Coverage Form. Coverage triggers by the actual filing date or receipt of the claim, in addition to the date of loss or injury. It handles any covered loss or claim filed during the policy period, regardless of the date of the occurrence, subject to the retroactive date on the declarations. While the retroactive date can be any date, for the most complete coverage it should be the first date when claims-made coverage applied to the risk. Any other date will result in a gap of coverage because an occurrence coverage form applies to any loss or damage that occurs prior to that date while claims-made coverage applies to only occurrences that take place after the retroactive date.

CG 00 33–Liquor Liability Coverage Form–Occurrence Basis is analyzed first. It is followed by a summary analysis of CG 00 34–Liquor Liability Coverage Form–Claims-Made Basis that addresses only the differences between it and CG 00 33.

This analysis is of the 04 13 edition of these coverage forms. Changes from the12 07 editions are in bold print.

COVERAGE FORM ANALYSIS

CG 00 33 opens by stating that certain provisions in it restrict coverage. It encourages the insured to carefully read the coverage form in order to understand its rights and duties and to determine what is covered and not covered. It also points out that the terms you and your to refer to the named insured and that an insured is any person or entity that qualifies as such under Section II–Who Is an Insured. The terms we, us, and our refer to the insurance company that provides the coverage. It refers to Section V–Definitions because understanding the definitions is critical to understanding CG 00 33.

SECTION I–LIQUOR LIABILITY COVERAGE

1. Insuring Agreement

a. The insurance company agrees to pay amounts the insured is legally obligated to pay as damages because of injury that CG 00 33 covers. The liability for the injury or damage must be imposed on the insured because it sells, serves, or furnishes alcoholic beverages. The insurance company also has the right and duty to defend the insured against any suit that seeks damages but only if coverage applies to the damages alleged in the suit. Payment does not exceed the limits of insurance.

The insurance company's right and duty to defend end when the coverage form’s limits of insurance are used up by paying judgments and settlements.

There are no other obligations to pay or to perform any other acts or services other than those stated in Supplementary Payments.

b. Coverage applies to injury that occurs during the policy period and in the coverage territory. If an injury is a reoccurrence of an injury that started in a prior policy period, coverage applies only if neither an insured under Paragraph 1. nor any other authorized employees knew about that prior injury.

c. Injury that occurs during the policy period includes any continuation, change, or resumption related to that injury after the policy period ends.

d. Injury is considered known and to have occurred at the earliest date of the following that an insured or one of its authorized employees:

Reports all or any part of it to the insurance company
Receives written or verbal demands or claims for damages because of it
Becomes aware in any other way that an injury occurred or is occurring

Example: Joe’s Bar and Grill is a newly opened business. Joe purchases CG 00 01–Commercial General Liability Coverage Form to cover the business but delays purchasing liquor liability coverage until he can afford it. An incident occurs two days before the liquor liability coverage is to go into effect. One of Joe's bartenders serves alcohol to Sam, who is clearly intoxicated. He falls while leaving the establishment, strikes his head, and is seriously injured. He sues Joe for his medical bills based on Joe's bartender having served him alcohol when he was already obviously intoxicated. Joe's CG 00 01 does not respond because of its liquor liability exclusion. Joe’s CG 00 33 denies the claim because the loss occurred before its inception date.

Note: The chart below illustrates that CG 00 33 provides only liquor liability coverage. It is in addition to CG 00 01 and does not replace it. It fills one gap in CG 00 01.

Type of Liability	Covered by CG 00 01?	Covered by CG 00 33?
Premises Liability	Yes	No
Products Liability	Yes	No
Completed Operations Liability	Yes	No
Personal Injury Liability	Yes	No
Liquor Liability	No (if in the liquor business)	Yes

Related Court Cases:

Liquor Liability Exclusion Held Applicable to Nonprofit VFW Post

Liquor Liability Suit Based on Failure to Restrain Patron Did Not Circumvent Exclusion

2. Exclusions

This insurance coverage does not apply to any of the following except as noted:

a. Expected or Intended Injury

Coverage does not apply to injury that is expected or intended by the insured. This exclusion has an exception that covers bodily injury that results from the insured using reasonable force to protect persons or property.

Example: Amy owns the Li'l Drinkin' Shack and hires Fred to be the bouncer. Patrick, a very intoxicated customer, attempts to attack Jeri, another customer.

Fred intervenes to protect Jen but ends up making the injury worse. Jen’s family sues Li’l Drinkin’s Shack for Jen’s injuries and coverage applies because Fred was attempting to protect Jeri from Patrick.

Note: The primary reason for this exclusion is to keep the insurance company from becoming involved with non-accidental losses and is in the public interest. It ensures that the insured will not use the insurance coverage for gain, such as theft, to inflict injury on a competitor, as an instrument of revenge, or to cause any other intentional harm. This exclusion's wording continues to be challenged and interpreted by the courts. ISO does not currently have an endorsement available to buy back this coverage or to delete this exclusion.

b. Workers Compensation and Similar Laws

There is no coverage for any requirement or obligation of the insured imposed by any workers compensation, disability benefits, unemployment compensation or similar law.

Example: Joe’s Micro Brewery always asks its employees to help test new beers. Sue and a few waitresses participate in the event, but Sue has a few too many and slips and falls as she tries to stand up. She sustains serious injuries to her right leg and cuts to her face. Sue receives workers compensation benefits but wants more. She sues Joe’s but coverage is denied under the CG 00 33 due to the exclusion.

Note: The intent of this exclusion and the Employer’s Liability exclusion is to eliminate the possibility of CG 00 33 indemnifying the insured for an injury that workers compensation or employer’s liability policies cover.

c. Employer’s Liability

Bodily injury to an employee of the insured as a result of employment or performance of duties in conjunction with conduct of the insured’s business is excluded. Bodily injury to the employee’s spouse, children, parents, brothers, or sisters as a consequence of that employee’s bodily injury is also excluded. This exclusion applies whether the insured is liable as an employer or in any other capacity, or whether it must share damages with or repay someone else who must pay damages because of the injury.

Example: Sue's husband, Jim, takes a different approach. He sues Joe's for the family’s loss of income and cost of childcare during her rehabilitation. As in the previous situation, there is no coverage.

Example: Crystal was at Joe’s the night of Sue’s accident. She was a temporary waitress hired through an employment agency. When Sue started to fall, she grabbed an intoxicated Crystal who fell along with her. When Crystal sues Joe’s, coverage is still not available because Crystal has coverage under the agency’s workers compensation.

d. Liquor License Not In Effect

Coverage does not apply to injury due to selling, serving, or furnishing alcoholic beverages if the required liquor license is not in effect.

Notes:

This exclusion is consistent with other coverage forms because providing alcoholic beverages without a license is illegal and insurance coverage does not apply to illegal activities.

Previous editions of CG 00 33 required that a liquor license had to expire, be suspended, cancelled, or revoked. The intent was to deny coverage if a license was required but not in effect. However, the previous wording was ambiguous. This is very clear.

Example: The state liquor board suspends Joe's Bar and Grill’s liquor license because he sold alcohol to minors many times. Joe continues to operate without the required license. Another minor is served alcohol, becomes intoxicated, and causes injury. The minor's parents sue Joe. Because of this language, this claim is excluded because the loss occurred when Joe did not have a valid liquor license.

e. Your Product

There is no coverage for injury that arises out of the insured's product. However, this exclusion has an exception. It does not apply to injury that the insured or an insured's indemnitee may be liable for because of any of the following:

Causing or contributing to any person's intoxication
Furnishing alcoholic beverages to underage drinkers or persons already under the influence of alcohol
Any law that regulates selling, giving, distributing, or using alcoholic beverages

Examples:

Joe’s Microbrewery beer tasted good but several customers became very ill. Turns out that the beer was placed in barrels that had been treated with a corrosive material. CG 00 33 does not cover these injuries. Instead that is a CGL exposure.
Joe's Microbrewery serves contaminated potato salad as part of its special weekend promotion and 22 people become ill. CG 00 33 does not cover these injuries. Instead this is a CGL exposure.

f. Other Insurance

When other insurance is available to cover any injury that is covered under this coverage part, this coverage part will not pay anything. This applies even if that other insurance’s limits have been exhausted.

The only exception is when that other insurance covers liability imposed on the insured due to any act of providing alcoholic beverages.

g. War

There is no coverage for bodily injury or property damage caused directly or indirectly in any way by war, undeclared war, and civil war. This includes warlike action by a military force. This exclusion also applies to actions a government takes to prevent or defend against an expected or actual attack by any government or other authority that uses military personnel or agents. It also applies to rebellion, revolution, insurrection, or unlawful seizure of power and the action the government takes to prevent or defend against any of these.

SUPPLEMENTARY PAYMENTS

The Insuring Agreement above explains the insurance company’s obligations and it has no other obligations except for following Supplementary Payments. There are seven supplementary payments. The insurance company pays these amounts only when it investigates or settles claims or during its defense of suits brought against an insured. These payments do not reduce the limits of insurance.

All expenses it incurs to investigate or settle

Cost of bonds to release attachments. It pays for only the cost of bond amounts that are within the limit of insurance that applies. The insurance company is not required to furnish these bonds.
Reasonable expenses the insured incurs at the insurance company's request to assist it investigate or defend a claim or suit. This includes up to $250 per day in lost earnings if the insured must be away from work but only if the insurance company asked the insured to take time off work.
Suit-related court costs that are the insured’s responsibility. This does not include attorney fees or expenses that are the insured's responsibility.
Prejudgment interest that is the insured’s responsibility on the part of any judgment the insurance company pays. However, the company does not pay any prejudgment interest that accrues during the period of time after it makes the offer if it offers the limit of insurance.
Interest that accrues on the full amount of any judgment after it is entered but before the insurance company pays, offers to pay, or deposits with the court the part of the judgment within the limits of insurance that is its responsibility

SECTION II–WHO IS AN INSURED

1. If named or designated as an insured on the declarations:

a. Individual. The individual and the individual's spouse are insureds.

Note: There is no reference to business operations. This means the individuals named do not necessarily have to be in businesses.

Example: Joe Johnson owns Joe’s Microbrewery as an individual. Both Joe and his wife are insureds. Joe also owns a different sole proprietorship individually where he brews small amounts of beer. Joe and his wife are insureds with respect to that operation as well. However, Joe is also involved in a dance club he and his brother own as a partnership. In this case, the partnership is not included as an insured.

b. Partnership or joint venture. The named insured is an insured. The insured’s members and partners and their spouses are also insureds but only when they are conducting the named insured’s business.

Example: In the example above, if Joe makes his brother a partner in Joe’s Microbrewery, both partners and their spouses are covered to the extent of their duties as partners in the business. However, there is no coverage for the sole proprietorships or for any other partnerships that involve either of these partners.

c. Limited liability company. The limited liability company is an insured. Members of the company are insureds but only when they are conducting the named insured’s business. The named insured's managers are also insureds but only with respect to their duties as managers.

d. Any other organization. That organization is an insured. Executive officers and directors are insureds but only with respect to their duties as such. Stockholders are also insureds but only for the very limited liability they have as stockholders.

e. (04 13 addition) A trust. The trust is an insured. The named insured’s trustees are also insureds but this is limited to only their duties as trustees of the trust.

2. The following are also insureds:

a. The named insured's employees are insureds. This does not include executive officers of an organization or managers of a limited liability company. However, the employees are insureds only for acts within the scope of their duties that relate to conduct of the business. No employee is an insured for any of the following injury:

To the named insured, its partners, or members
To a co-employee when that co-employee is in the course of his or her employment or while performing duties in the conducting of the named insured's business

Example: Shari and Emma work for Joe's Microbrewery. Shari had a rough night and Emma provided her with some liquid comfort. Shari was in an accident on the way home. She sued Joe’s because of it providing the alcohol and also sued Emma because she served the alcohol to her. Emma is not an insured for this action. Removing this action keeps this type of injury within the confines of Workers Compensation as the exclusive remedy, Employers Liability, or a similar coverage.

To a designated relative of that co-employee as a consequence of the paragraph above

Example: Continuing the example above, Shari’s injuries are so serious that she dies. Shari's family files a claim against Emma and Joe's for its emotional distress as a result of their loss. Emma is not an insured and the claim against her is denied. The claim against Joe’s is also not covered but that is under the exclusion section.

Where there is an obligation to share damages with or to repay another party that must pay damages because of the injury described in the paragraphs above. This works with the Employers Liability exclusion to prevent such actions from being covered.

No employee is an insured for property damage to property owned or occupied by, or rented or loaned to that employee, any other employee, or by any partner or member of a partnership, joint venture, or limited liability company.

b. Any party that has proper temporary legal custody of a deceased named insured's property. However, this is limited to liability that arises out of or is caused by maintaining or using that property and only until a proper legal representative is appointed.

c. A properly appointed legal representative has all the named insured's rights and duties if the named insured dies. However, this is limited to its duties as a properly appointed legal representative.

3. Any newly formed or acquired organization that the named insured owns or has majority interest in is a named insured if that organization has no other insurance. This provision's coverage ends 90 days after the formation or acquisition or at the end of the policy period, whichever occurs first. Coverage does not apply to injury that occurred before the named insured formed or acquired the organization.

This does not apply to newly formed or acquired partnerships, joint ventures, or limited liability companies.

Note: ISO has introduced an endorsement to provide this coverage to newly formed or acquired limited liability companies.

Nobody is an insured with respect to conduct of any current or previous partnership, joint venture, or limited liability company that is not listed as an insured on the declarations.

SECTION III–LIMITS OF INSURANCE

1. The most the insurance company pays are the limits of insurance on the declarations. This is subject to the rules outlined below and is regardless of the number of insureds, claims made, suits brought, or number of parties that make claims or bring suits.

Example: Joe Johnson is covered under a CG 00 33 form. The named insured on the declarations is Joe Johnson and Joan Johnson d/b/a Joe's Microbrewery and Joe's Bar. An injury to a customer results in a suit. The suit that claims damages names the two owners, Joe and Joan. Coverage applies to both Joe and Joan but the limits apply once for both of them rather than separately.

2. The most the insurance company pays for the total of all injury that results from providing alcoholic beverages is the Aggregate Limit on the declarations.

Note: Coverage ends when this limit is used up by paying or settling claims and judgments during the policy period.

Example: Joe's Liquor Liability Coverage Form has limits of $200,000 for Each Common Cause and $1,000,000 for the Aggregate Limit. Coverage is effective 01/10/19 and the losses for the year to date are as follows:
Date of Loss	Amount of Loss
02/05/19	$195,000
04/02/19	$84,000
06/22/19	$200,000
07/11/19	$71,000
07/28/19	$141,500
08/17/19	$178,000
10/30/19	$130,500
Total Losses	$1,000,000
A $200,000 claim is submitted for a loss that occurred on 11/13/19. It is denied because the aggregate limit has been used up by paying claims during the current policy period.

3. The Each Common Cause Limit is the most the insurance company pays for all injury that one or more persons or organizations sustain because alcoholic beverages were provided to a person. This is subject to the Aggregate Limit.

Example: Mavis, Ann, and Shirley each purchase a bottle of wine at the Friendly Tavern and Package Store. They spend the afternoon together at a park, consume the wine, and drive home. All three are injured in accidents. Their parents sue Friendly because all three are under the legal drinking age. Each one purchased her own bottle of wine. As a result, the Each Common Cause Limit is available for each suit, subject to the Aggregate Limit.

This section also clarifies how the limits of insurance apply. They apply separately to each consecutive annual period and to any remaining period of less than 12 months. This begins with the inception date on the declarations, unless extended after issuance for any additional period of less than 12 months. If that occurs, the additional period is treated as part of the last preceding period for the purpose of determining the limits of insurance.

Example: The original 12-month policy period ran from June 1 to June 1. During the second policy period, the insured requested that the policy period be extended to January 1 to match its accounting year. The limits apply separately to the first annual 12-month policy period of June 1 to June 1. They also apply separately to the second policy period that was extended an additional six months, from the original June 1 expiration date to the new January 1 date. From that point on, the annual 12-month period of January 1 to January 1 has a separate set of limits. If a short-term policy had been issued in place of the six-month extension, it would have had its own limits. Because the original policy period was extended, the original limits applied to both the original period and the extension period.

SECTION IV–LIQUOR LIABILITY CONDITIONS

1. Bankruptcy

The insurance company is not relieved of its obligations if the insured or its estate becomes bankrupt or insolvent.

2. Duties in the Event of Injury, Claim, or Suit

The named insured has a number of duties to perform if a claim or demand for coverage occurs:

a. The named insured is responsible for making sure that the insurance company is notified of any injury that may result in a claim as soon as practicable. As a minimum, the notice should include information with respect to how, when, and where the event took place along with the names and addresses of all injured parties and any witnesses. The notice should also describe the nature and location of the injury.

b. With respect to claims made or suits brought, the named insured must immediately record its details, the date it was received, and notify the insurance company as soon as practicable. The named insured is also responsible for seeing that the insurance company receives written notice of the claim or suit as soon as practicable.

Note: “As soon as practicable” is used in the above in lieu of “as soon as possible” or immediately. This term means that the named insured has some time in which to act but that its actions should be timely.

Related Court Cases:

Does Untimely Notice Bar Recovery?

Late Notice Exclusion Requires "Prejudice"

c. Every insured involved in or with the claim must:

Immediately send the insurance company copies of demands, notices, summonses, and legal documents it receives in conjunction with the claim or suit
Authorize and give the insurance company permission to obtain records and other needed information
Cooperate with the insurance company as it investigates or settles the claim or defends against the suit
When the insurance company requests, help it enforce any right against any person or organization that may be liable to the insured for injury or damage that this insurance covers.

d. No insured may voluntarily make any payments, assume any obligations, or incur any expenses other than first aid without the insurance company's consent. If it does, it does so at its own cost or expense.

3. Legal Action Against Us

No party has the right to bring or join the insurance company in any way into a suit. The insurance company cannot be sued by any party until all of the policy’s terms and conditions have been met.

Suit can be brought against the insurance company to recover on an agreed settlement or on a final judgment against the insured. However, the liability of the insurance company is limited to damages that are payable under CG 00 33’s terms and the applicable limit of insurance.

An agreed settlement is a settlement and release of liability that the insured, the insurance company, and the claimant or the claimant's legal representative sign.

4. Other Insurance

Note: The wording of this condition appears to be in conflict with Exclusion. f. Other Insurance described above.

The insurance company's obligations to pay are limited if there is other valid and collectible insurance that applies to the loss, as follows:

a. Primary Insurance

This insurance is primary, and the insurance company's obligations are not affected unless any other insurance that applies to the loss is also primary. It then shares with that insurance described under Method of Sharing.

Example: Mairum’s Clothing held a fashion show at its shop one afternoon for select customers to view the latest imported merchandise lines. Light appetizers, wine, tea, and coffee were served. Mairum's obtained a liquor license and also purchased a single event liquor liability policy because of local ordinances. A young lady attending the event who was under age 21 was involved in an automobile accident after the event. Her blood alcohol content was more than twice the legal limit and she did not have any auto insurance coverage. The subsequent legal action named Mairum’s because it served liquor to a minor during the fashion show. Mairum's CG 00 33 and CG 00 01 both responded. Because both are ISO coverage forms and both are primary, the contribution by equal shares method applied and each contributed 50% of the amount claimed, up to their limits of insurance.

b. Method of Sharing

If the other insurance permits contribution by equal shares, this insurance also does. Each insurance company contributes equal amounts until its limit of insurance is used up or the loss is paid, whichever occurs first.

If the other insurance does not include contribution by equal shares, contribution is by limits. Under contribution by limits, contribution is proportioned based on a developed ratio. Ratios are determined by dividing each insurance company's limit by the total limits available. The loss is then apportioned between the various policies based on that ratio.

Other insurance can be complicated and involve situations that lead to litigation.

5. Premium Audit

a. The insurance company calculates all premiums according to its rules and rates.

b. The advance premium on the declarations is only a deposit premium. At the end of each audit period, the insurance company determines the actual earned premium for the period and notifies the first named insured. The date on the billing notice is the date the company expects to receive the premium billed. However, if the advance and audit premiums are more than the earned premium, the insurance company refunds the excess to the first named insured.

c. The first named insured is required to keep the records and information the insurance company needs to do the premium calculations and must send copies of them to the company when it requests.

Note: Audit period is not clearly defined or explained. It can be monthly, quarterly, annually, or any reasonable period the first named insured and the insurance company agree to.

Example: The policy term runs from January 1 to January 1 and is subject to quarterly audit. The deposit premium charged is expected to approximate the final earned premium for the policy term. An audit is done at the end of each quarter to determine that quarter’s exposures. The insurance company calculates the earned premium based on the audit, deducts it from the deposit premium, and sends a statement to the first named insured that includes that quarter’s calculations. At the point where the earned premium exceeds the deposit, the company sends a statement that includes a bill for the amount due. The first named insured is responsible for paying the amount billed

Note: ISO has introduced CG 99 09–Premium Audit Noncompliance Charge. This is an optional form that results in a charge being made against named insureds who do not respond to audit information requests.

6. Representations

By accepting this policy as issued, the named insured agrees that the statements on the declarations are complete and accurate. The named insured also agrees that such statements are based on representations it made to the insurance company and that the policy is issued based on those representations.

Note: This condition is used to void coverage and to prevent the named insured from making the argument, after a loss, that the Declarations was issued in error.

Related Court Cases:

Material Misrepresentations in Application Completed By Agent and Signed By Applicant Warranted Coverage Denial

Contractor Paints Itself into a Corner

7. Separation of Insureds

Other than the limits of insurance and any rights and duties that apply specifically to the first named insured, the insurance provided applies to each named insured as if it was the only named insured. It also applies separately to each insured against whom a claim is made or a suit is brought.

8. Transfer of Rights of Recovery Against Others to Us

Any rights the insured has against others to recover all or part of any payment the insurance company made transfer to the company. The insured must preserve those rights and not do anything after the loss occurs to impair them. The company can request that the insured bring suit or transfer those rights to it and help it enforce them.

Related Court Case: Trash Talking: Subrogation Waiver Debated

9. When We Do Not Renew

If the insurance company decides to not renew, it must mail or deliver written notice stating so to the first named insured on the declarations at least 30 days before the expiration date. If the notice is mailed, proof of mailing is sufficient proof of notice.

Note: This paragraph is modified by specific endorsements in many states with respect to the number of days of advance notice of non-renewal required, what is considered acceptable as proof of mailing, and valid reasons to terminate or not renew coverage. Each state’s requirements must be evaluated carefully when considering changing or modifying this condition.

SECTION V–DEFINITIONS

Defined words are used throughout the coverage form. Restricting their meaning to such definitions provides a way for everyone to have a clearer understanding of the coverage intended. There are ten defined terms.

1. Bodily injury

This is bodily injury, disability, sickness, or disease a person sustains. Death that occurs as a result of bodily injury, sickness, or disease is also considered bodily injury regardless of when the death occurs.

2. Coverage territory

This is all of the following:

The United States of America, its territories and possessions, Puerto Rico, and Canada
International waters or airspace. However, this is limited to when injury occurs during travel or transportation between the places described above.
Any other place in the place but only when the injury is due to goods or products the named insured made or sold in territory described earlier or the injury is due to activities of persons who live in that above described territory but who were attending to the insured’s business while away for a short period of time. This expanded territory applies only when the insured's responsibility to pay damages is determined in a suit based on the merits in the territory described in the first paragraph above or because a settlement is reached to which the insurance company agrees.

3. Employee

This term employee is broadened to include leased workers. It does not include temporary workers.

4. Executive officer

This is a person who occupies any officer position that the named insured's charter, constitution, by-laws, or similar governing documents created.

5. Injury

In liquor liability coverage, the term “injury” is used instead of “occurrence.” If there is no injury, there is no coverage. Therefore, it is a very important term. As used in this coverage form, injury is damages. The only damages considered are those because of bodily injury or property damage. Care, loss of services and loss of services are included within bodily injury or property damage.

Example: Franks buys many beers from his waitress, Mavis, over the course of the evening. He becomes very intoxicated and while in his intoxicated state he does the following:
Action	BI or PD	Injury
Proposes marriage to the Mavis	No	No
Antagonizes Mavis’ husband, Lonnie	No	No
Stumbles over a table and falls on Lonnie	Yes	Yes
Signs a contract giving his car to Mavis	No	No
Falls in front of an oncoming bus	Yes	Yes

6. Leased worker

This is a person a labor leasing firm leases to the named insured. There must be an agreement between the named insured and the labor leasing firm. The duties the leased worker is to do must be related to conduct of the named insured's business. Temporary workers are not considered leased workers.

7. Property damage

Property damage is physical injury to tangible property and includes the resulting loss of use because the property is damaged. Property damage is also the loss of use of tangible property even if no property has been physically injured. Loss of use is considered to have occurred at the time of the injury or occurrence that resulted in the property not being used.

8. Suit

This is a civil proceeding that alleges damages for bodily injury, property damage, or personal and advertising injury that this insurance covers. Arbitration proceedings and any other alternative dispute resolution proceeding that claims such damages is also considered suit provided that the insurance company agrees that the insured should participate in them.

9. Temporary worker

There are two types of temporary worker. One type is furnished to the named insured to substitute for a permanent employee. The employee that the temporary employee substitutes for must be only temporarily away from work. Another type is a person who is furnished for seasonal or short-term needs.

10. Your product

Any goods or products manufactured, sold, handled, distributed or disposed of by the named insured are your product. It is also such goods or products that are manufactured, sold, handled, distributed or disposed of by others that trade under the named insured’s name, or by any party whose business or assets the named insured acquired. Your Product includes containers, materials, parts, or equipment furnished in connection with such goods or products.

Vehicles are never considered containers. Real property is never considered your product.

Warranties or representations that are made concerning the fitness, quality, durability, performance, or use of the product are also your product.
The providing of warnings or instructions that are adequate is also your products and this includes the failing to provide them.
Vending machines or other property that are rented to or located for the use of others but not sold are not considered your product.

CG 00 34–LIQUOR LIABILITY COVERAGE FORM (CLAIMS-MADE BASIS)

The header section of this coverage form states that the form provides claims-made coverage and encourages the named insured to read it carefully. The purpose of this statement is to alert the named insured to the fact that certain parts of this coverage form are different than the occurrence basis coverage form.

This analysis addresses only the parts of the claims-made coverage form that differ from the occurrence coverage form. Those differences are found in the following sections:

Section I–Liquor Liability Coverage Insuring Agreement
Section IV–Liquor Liability Conditions (Duties In The Event of Occurrence, Offense, Claim, or Suit)
Section IV–Liquor Liability Conditions (Other Insurance–Excess insurance)
Section IV–Liquor Liability Conditions (Your Right to Claim and Occurrence Information)
Section V–Extended Reporting Periods

Note: The WHO, WHAT, WHERE, and HOW aspects of coverage are unchanged. All differences are based on WHEN.

SECTION I – LIQUOR LIABILITY COVERAGE

1. Insuring Agreement

Paragraphs b. and c. replaces paragraphs b., c., and d.

b. Coverage applies to injury only if:

The injury is caused by an occurrence that takes place in the coverage territory
The injury did not occur before any retroactive date on the declarations or after the end of the policy period
A claim for damages is first made against any insured during the policy period or any extended reporting period provided

c. Claims made by persons or organizations that seek damages are treated as having been made when the notice of claim is first received and recorded by any insured or the insurance company, or when the insurance company makes a settlement, whichever occurs first. All claims for damages because of injury to the same person, including the death of that person, are treated as having been made at the time that the first of those claims was made against any insured.

Example: Angelo is struck by a car being driven by Leona on 3/1/19. Leona had spent the evening at Cruisin’ In and had purchased quite a few rounds. Angelo is severely injured. The first notice Cruisin In’ receives is when a claim for Angelo’s medical bills is presented on 09/01/19. Angelo’s wife follows up with notification of her claim for loss of consortium on 2/15/20. Angelo dies on 05/18/21 and his family files a wrongful death claim against the insured. On 12/01/21, Angelo’s workers compensation carrier subrogates against the insured for the costs of the injuries he sustained that it paid. Each of these claims is treated as having the initial claims-made date of 09/01/19.

SECTION IV–LIQUOR LIABILITY CONDITIONS

2. Duties In The Event of Occurrence, Offense, Claim, or Suit

Only the lead language for item b. is changed. Under the Claims-made basis it refers to a claim being received while under the occurrence basis it refers to a claim being made or a suit being filed.

4. Other Insurance–Excess insurance

Subparagraph b. Excess Insurance has an additional provision that is not in the occurrence coverage form. It states that this insurance is excess over any other insurance coverage if it is written on any other basis than claims-made and is effective before this coverage's effective date. However, this is only if either of the following applies:

There is no retroactive date on this insurance’s declarations
The other insurance has a policy period that continues after the retroactive date on this insurance’s declarations

This basically means that if claims-made coverage replaces occurrence coverage, the occurrence coverage form is primary and the claims-made coverage form is excess in cases where coverage overlaps because of establishing the retroactive date.

10. Your Right to Claim and Occurrence Information

Note: This condition in the claims-made coverage form is not in the occurrence coverage form. It details the claims-made claim information the insurance company is required to release for all periods that it provided coverage on that basis, the parties to whom it is required to release the information, and the conditions under which it must release the information. The detailed analysis follows.

The insurance company provides the first named insured information that relates to any claims-made liquor liability coverage issued to it during the previous three years. The required information is:

A list or other record of each occurrence not previously reported to any other insurance company. However, the insurance company must have received notice of the occurrence according to the coverage form's conditions. The date of the occurrence and a brief description must be provided but only if that information was in the initial loss notice it received. The insurance company is essentially required to supply only the information it receives.

Payments made and reserves established for the Aggregate Limit in a policy year summary report. There is no requirement for specific occurrence-by-occurrence information. The only requirement is a summary so the insured knows about the impact on the General Aggregate.

Reserve amounts are based on the insurance company's judgment. They are subject to change at any time and without notice and should not be considered as final settlement amounts.

Note: It is extremely important to remember that none of this information should be disclosed or provided to any claimant or its representative without the insurance company's consent.

If the insurance company decides to cancel or not renew, it provides this claim information 30 days or more before the cancellation or non-renewal date. In other cases, it provides this information only after the first named insured requests it in writing. The insurance company must respond only if it receives the request no later than 60 days after the expiration date. It must then provide the information not more than 45 days after it receives the request.

The insurance company carefully develops and maintains claim and occurrence information for its own business purposes. It does not make any representations or warranties to any party with respect to its accuracy. Cancellation or non-renewal is still effective even if the information provided is not accurate.

SECTION V–EXTENDED REPORTING PERIODS

This section is in only the claims-made coverage form. It explains the extended reporting periods and terms available if the coverage is cancelled, not renewed, or replaced by coverage with a retroactive date later than the one on this coverage form. It also applies if coverage is renewed on other than a claims-made basis.

This section also explains how the limits of insurance apply and how the premium for the extended reporting period is charged. The detailed analysis follows.

1. The insurance company provides one or more described Extended Reporting Periods if any of the following applies:

Coverage is cancelled or not renewed.
The insurance company renews or replaces coverage with claims-made insurance but the retroactive date is changed to a later date than the one on the declarations for this coverage.
The insurance company renews with coverage that does not apply on a claims-made basis.

Note: The extended reporting period does not apply if the named insured requests the change in the retroactive date or if coverage on a different basis replaces claims-made coverage.

2. Extended Reporting Periods do not change the nature of the coverage provided or extend the coverage period. These periods only apply to claims for injury that occurs before the end of the coverage period and after any retroactive date on the declarations.

3. A Basic Extended Reporting Period is included automatically and without any additional premium charge. It begins at the end of the coverage period. It lasts for:

Five years for claims because of injury reported to the insurance company not later than 60 days after the end of the policy period. The claim must be reported based on the terms in Section IV–Duties In The Event of Occurrence, Offense, Claim, or Suit.
Sixty days for claims that arise out of injury not previously reported to the insurance company

This period does not apply to claims covered under any subsequent insurance coverage the named insured purchases or that would be covered except for the limit of insurance that applies to such claims being used up.

4. The Basic Extended Reporting Period does not increase or reinstate the Limits of Insurance.

5. A Supplemental Extended Reporting Period is available by endorsement and for an additional premium charge. Its duration is unlimited and begins when the Basic Extended Reporting Period ends.

The named insured must request this endorsement in writing not later than 60 days after the end of the policy period. This period does not take effect unless the named insured pays the additional premium by the due date.

The insurance company calculates the additional premium according to its rules and rates. In doing so, it considers the nature of the exposures, previous types and limits of insurance, limits of insurance that remain to pay future damages, and other relevant factors. In any event, the additional premium is not more than 200% of the annual premium charged for this coverage form.

The endorsement establishes the terms that apply to the Supplemental Extended Reporting Period consistent with this section. It must include a provision that essentially states that the insurance available for claims first received during the period is excess over any other valid and collectible insurance in force after the Supplemental Extended Reporting Period begins.

6. The insurance company provides the supplemental aggregate limit of insurance described below if the Supplemental Extended Reporting Period is in effect. The limit applies only for claims first received and recorded during the Supplemental Extended Reporting Period. It is equal to the dollar amount on the declarations in effect at the end of the policy period for the aggregate entered dollar amount.

The Each Common Cause Limit continues to apply.

Note: Once the Supplemental Extended Reporting Period has been requested and the premium paid, it cannot be cancelled by either party.