1. Forms
2. CG
3. CG-34-01

What the form is

The CG 34 01, titled "Additional Insured—Owners, Managers or Lessors of Premises—Liquor Liability," is an endorsement to a commercial general liability policy that includes Liquor Liability Coverage. Its primary function is to extend liquor liability coverage to the owner, manager, or lessor of a premises that is leased to the named insured (the tenant) who is in the business of manufacturing, distributing, selling, serving, or furnishing alcoholic beverages. This endorsement provides the scheduled person or organization (the landlord or property manager) with additional insured status, but only with respect to liability arising out of the tenant's liquor-related operations on the leased premises specifically listed in the endorsement schedule.

Classes of business it applies to

This endorsement is crucial for property owners and managers who lease space to businesses that have liquor liability exposures. Examples include:

• Owners of shopping centers leasing space to restaurants or bars.
• Landlords of commercial buildings with tenants such as nightclubs, taverns, or liquor stores.
• Managers of event venues that are leased out for functions where alcohol will be served by the lessee.

For instance, if a patron sues both the bar (tenant) and the building owner (lessor) after an alcohol-related incident, this endorsement would provide coverage to the building owner under the bar's liquor liability policy for their vicarious liability.

Special considerations

Several important points to consider when using the CG 34 01 endorsement:

• Scope of Coverage: Coverage for the additional insured is specifically limited to liability arising from the tenant's sale or service of alcohol on the leased premises designated in the endorsement. It does not cover the additional insured's own negligence unrelated to the tenant's liquor operations.
• Contractual Requirements: Often, lease agreements will require the tenant to name the landlord as an additional insured on their liquor liability policy. This endorsement helps fulfill that requirement. The coverage provided to the additional insured will not be broader than what is required by the contract.
• Limits of Insurance: The coverage provided to the additional insured is subject to the limits of insurance stated in the tenant's liquor liability policy.
• Recent Form: This ISO endorsement was introduced in 2019, so some insurance carriers may have their own proprietary versions or may not have adopted this specific form yet, depending on the state.
• Tenant's Licensing: It's vital for the landlord to ensure their tenant maintains a valid liquor license, as most liquor liability policies exclude coverage if the proper licensing is not in place for any insured.

Key information for agents and underwriters

For insurance agents and underwriters, the CG 34 01 presents specific considerations:

• Risk Assessment: Underwriters should assess the tenant's liquor liability exposure (type of establishment, volume of sales, hours of operation, loss history) to understand the risk being extended to the additional insured. The landlord's own risk management practices regarding their tenants can also be a factor.
• Pricing: There might be a nominal premium charge for adding this endorsement, depending on the insurer and the perceived risk.
• Coverage Gaps: Agents should explain to landlord clients that this endorsement provides vicarious liability coverage stemming from the tenant's actions. It does not replace the landlord's own general liability coverage for their premises or operations.
• Documentation: It is crucial to accurately list the name of the additional insured (owner, manager, or lessor) and clearly describe the specific premises leased to the named insured in the endorsement schedule.
• Primary and Noncontributory: Landlords often request that the additional insured coverage be primary and noncontributory. The CG 20 01 endorsement (Primary And Noncontributory—Other Insurance Condition) can be used in conjunction with the CG 34 01 to achieve this, if agreed by the underwriter.