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Do I have coverage for this?

Every day we are bombarded with advertisements trying to sell us more insurance. For the average consumer, the choice is not particularly complicated.Most people are in the market for an auto, home, or renter’s insurance policy.But for a business, choosing the type of coverage needed to adequately protect one’s interests can be a much more complicated decision.

The average business will likely purchase a commercial general liability policy (“CGL”).This type of coverage provides protection from a variety of claims, including bodily injury, property damage, and personal injury caused by the business' operations and/or products.However, there are many risks the typical CGL policy will not cover and, in fact, will specifically exclude.

Take, for instance, the needs of a bar or tavern owner.Most states have adopted “dram shop” laws, which old businesses that sell alcoholic drinks, or a host who serves liquor to an intoxicated patron or guest, liable to anyone injured by the drunken patron or guest.A CGL policy may exclude coverage for such a claim. Instead, this risk is typically covered by a liquor liability policy, which protects a business that manufactures, sells, or serves alcohol against claims that occur when a patron drinks too much and injures himself or someone else.

Even a company that is not in the business of manufacturing, selling, or serving alcohol may need to purchase additional insurance coverage to protect against claims asserted by parties injured as a result of an intoxicated guest who was served alcohol. This type of coverage, referred to as host liquor liability coverage, protects your business against claims or suits that arise from the incidental selling or serving of alcoholic beverages, for example, beer or wine service at a company picnic.

Understanding the type of insurance your business may require is an important decision. Getting it wrong could result in a significant exposure to you or your business. Coverage for liquor liability is but one of many examples of coverage gaps that could leave your business exposed. 

If you have any questions concerning the type of insurance that meets your needs, or are in the unfortunate position of becoming embroiled in a dispute with your insurer, contact the author, Michael C. Ross at mcr@barrettlaw.com or a member of Barrett McNagny’s litigation practice group.

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