In reversing a lower court ruling, the Washington State Court of Appeals has agreed that liability insurance is not designed to cover each drink served to an already intoxicated customer as a separate incident.
The appellate court decision on Jan. 15 agreed with a friend of the court brief filed by the National Association of Independent Insurers (NAII) in the case of Spratt et al v. Crusader Insurance Co. The lower court ruled that the $1 million liability limit for selling alcohol to an intoxicated person under Crusader’s policy applied to each time the person was served after becoming intoxicated, up to the $2 million aggregate limit in the policy.
Monika McGuire, NAII assistant general counsel, legal services, said the appellate court properly interpreted the insurance policy as applying to serving drinks to any one person irrespective of how many beverages were served. Insurance coverage did not apply to each individual drink served, she said.
“It is to the advantage of insurers as well as consumers that the Court of Appeals upheld the principle of not expanding coverage beyond the clear language of the insurance policy,” McGuire asserted. “Anyone who signs a contract should be able to rest assured that all parties involved must adhere to the clear language of that document.”
The case stems from a lawsuit filed by individuals and heirs of individuals who were injured by a driver who became intoxicated while drinking at a pub and restaurant operated by Lawrence and Jane Spratt.
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