ISO has enhanced its commercial general liability (CGL) insurance program to address exposures for establishments that allow their patrons to bring and consume alcoholic beverages on their premises (commonly referred to as “bring your own alcohol establishments” or “BYO establishments”). ISO is a member of the Verisk Insurance Solutions group at Verisk Analytics (Nasdaq:VRSK).
“Commercial general liability policies typically provide host liquor liability coverage for policyholders who periodically host or sponsor events where alcohol is served – as long as the policyholder is not in the business of serving, selling, or furnishing alcoholic beverages,” explains Beth Fitzgerald, senior vice president of ISO’s Insurance Programs and Analytic Services division. “If the policyholder is in such a business, a liquor liability exclusion usually applies. Stand-alone liquor liability policies specifically cover the liquor liability exposure of those policyholders.”
Fitzgerald says more and more restaurants are allowing their patrons to bring and consume alcohol on their premises, and some are questioning whether those risks would have related coverage under standard general liability policies – or whether they would be subject to the liquor liability exclusion in those policies and need a stand-alone liquor liability policy.
The ISO operating unit of Verisk Analytics has revised the liquor liability exclusions contained in its general liability policies to address this. As revised, the exclusions now contain an exception in which an insured would not be considered in the business of serving, selling, or furnishing alcohol under the scope of the liquor liability exclusion simply by allowing someone to bring and consume their own alcohol on its premises. For insurers who prefer to address the BYO exposure through a separate liquor liability policy, ISO has provided a way to exclude the BYO exposure from their commercial general liability forms and introduced an endorsement to extend the coverage under liquor liability policies to BYO establishments.
“These changes provide insurers with underwriting tools to handle risks with different types of liquor liability exposures,” added Fitzgerald. “These tools can accommodate varying appetites with respect to the scope of liquor liability coverage that an insurer may be willing to provide to an individual BYO establishment.”
In addition to the BYO-related coverage options, ISO has introduced new restaurant classifications specific to BYO alcohol establishments, as well as rating information with respect to those risks.