1. Forms
2. CG
3. CG-24-08

What the form is

The CG 24 08 Liquor Liability endorsement is designed for the Commercial General Liability (CGL) policy. Its primary function is to remove, in its entirety, the standard Liquor Liability Exclusion (often referred to as Exclusion c.) found in the CGL. By deleting this exclusion, the endorsement effectively adds liquor liability coverage back into the CGL policy, making the insurer liable for damages arising from the selling, serving, or furnishing of alcoholic beverages, subject to the policy's other terms and conditions.

Classes of business it applies to

This endorsement is typically considered for businesses where the liquor liability exposure is minor or incidental to their primary operations. It is generally not intended for businesses whose main enterprise is the sale or service of alcohol, such as bars, nightclubs, liquor stores, or full-service restaurants with significant alcohol sales. Examples of businesses that might be considered for this endorsement include:

• A professional office that hosts an annual holiday party where alcohol is served.
• A retail store that offers complimentary wine during a special evening shopping event.
• A caterer who occasionally serves alcohol as part of a broader food service contract, but whose primary revenue is not from alcohol sales.

It's crucial that the liquor exposure is genuinely minimal, as this endorsement brings the exposure under the general liability limits and terms, which may not be adequate or appropriate for significant liquor-related risks.

Special considerations

There are several important considerations when using the CG 24 08 endorsement:

• Not a Substitute for Full Liquor Liability Coverage: For businesses with more than incidental exposure, a separate Liquor Liability Coverage Form (e.g., CG 00 33 or CG 00 34) is usually the more appropriate solution. These dedicated policies are specifically designed to address the unique risks associated with alcohol sales and service.
• Underwriting Scrutiny: Insurers will typically scrutinize requests for this endorsement carefully. They need to be comfortable that the insured's liquor exposure is indeed minimal and that the existing CGL pricing adequately reflects the added risk.
• Potential for Significant Claims: Even with minor exposures, liquor-related incidents can lead to severe claims (e.g., DUIs, assaults). If such a claim occurs and is covered under the CGL via this endorsement, it could significantly impact the insured's loss history and future insurability for general liability.
• Availability: Not all insurers may be willing to provide this endorsement, or they may only offer it with a significant additional premium.
• BYOB Establishments: Standard CGL forms were revised to clarify that merely permitting people to bring their own alcohol onto the premises for consumption does not, by itself, constitute being in the business of selling, serving, or furnishing alcohol. However, if an establishment using this endorsement has any involvement beyond passive allowance, the exposure needs careful evaluation.

Key information for agents and underwriters

For Agents:

• Thoroughly investigate the client's alcohol exposure. Understand the frequency of alcohol service, who provides/serves it, whether it's sold or given away, and what controls are in place (e.g., server training, ID checks).
• Discuss the limitations of this endorsement versus a standalone liquor liability policy, especially if there's any doubt about the exposure being truly incidental.
• Document the assessment of the liquor exposure and the rationale for recommending (or not recommending) this endorsement.

For Underwriters:

• Carefully evaluate the nature and extent of the insured's liquor-related activities. Question any ambiguities.
• Consider the insured's overall risk profile and loss history.
• Price the endorsement appropriately to reflect the added exposure, even if deemed minor. Be aware that deleting the exclusion entirely brings potentially volatile claims under the CGL.
• Determine if the CGL limits are adequate for the potential liquor liability claims or if a separate policy with its own limits is more prudent.

In summary, while the CG 24 08 can be a cost-effective way to address very minor liquor exposures, it should be used cautiously and with a full understanding of the potential implications.