1. Forms
2. CG
3. CG-00-34

What the form is

The CG 00 34 Liquor Liability Coverage Form (Claims-Made Version) is an insurance policy form developed by the Insurance Services Office (ISO). It provides liability coverage for businesses that are in the business of manufacturing, distributing, selling, serving, or furnishing alcoholic beverages. This form is specifically designed to cover liabilities that are typically excluded under a standard Commercial General Liability (CGL) policy's liquor liability exclusion. Being a claims-made form, coverage is triggered when a claim is first made against the insured during the policy period or any applicable extended reporting period, for an 'injury' or 'damage' that occurred on or after the retroactive date stated in the policy.

Classes of business it applies to

This form is essential for a variety of businesses where liquor liability exposure exists. Examples include:

• Bars and taverns
• Restaurants that serve alcohol
• Package liquor stores
• Hotels with bars or room service alcohol sales
• Nightclubs
• Caterers who serve alcohol at events
• Manufacturers of alcoholic beverages (breweries, wineries, distilleries)
• Wholesalers and distributors of alcoholic beverages
• Businesses that allow customers to bring their own alcoholic beverages (BYOB establishments), as this form can be endorsed to cover such exposures.

Special considerations

• Claims-Made Nature: The most significant consideration is its claims-made trigger. This means the policy in effect when the claim is reported is the one that responds, not necessarily the policy in effect when the incident occurred (unless it's the same policy period and after the retroactive date). This necessitates careful management of retroactive dates and consideration of purchasing an extended reporting period (tail coverage) if the policy is cancelled or non-renewed.
• Retroactive Date: The policy will have a retroactive date. Incidents occurring before this date are not covered, even if the claim is made during the policy period.
• Dram Shop Laws: Coverage under this form is particularly important in states with strict dram shop laws, which can hold businesses liable for injuries or damages caused by intoxicated patrons.
• Exclusions: While it provides liquor liability coverage, it will still contain other standard CGL exclusions unless specifically modified. It's crucial to understand what is and isn't covered. For instance, like the CGL, it typically excludes expected or intended injury, but provides an exception for bodily injury resulting from the use of reasonable force to protect persons or property.
• Trusts as Named Insureds: Revisions to this form have allowed for trusts to be included as named insureds, with trustees automatically covered for their duties as trustees.

Key information for agents and underwriters

• Risk Assessment: Underwriting this coverage requires a thorough assessment of the insured's operations, including the type and volume of alcohol served, hours of operation, employee training programs (e.g., responsible alcohol service), security measures, and prior loss history.
• Premium Basis: Premiums are typically based on the insured's alcoholic beverage sales.
• Endorsements: Several endorsements can modify this coverage form. For example, endorsements are available to add additional insureds such as premises owners/lessors (CG 34 01), grantors of franchises (CG 34 02), or event sponsors (CG 34 04). There are also endorsements to amend the liquor liability exclusion or to provide coverage for BYOB establishments (e.g., CG 24 06).
• Interaction with CGL: It's vital to ensure there are no unintended gaps between the CGL and the Liquor Liability Coverage Form. This form is designed to fill the CGL's liquor exclusion for those 'in the business' of alcoholic beverages.
• State Variations: While an ISO form, its applicability or specific interpretations can be affected by state laws and regulations. For example, the CG 00 34 is noted as not being applicable in Connecticut in some older references. Agents should always verify state-specific rules.