Questions have surfaced lately regarding liquor liability. In a scenario where hotel guests attend a free-of-charge cocktail hour, is there liability coverage under the unendorsed general liability (GL) policy? There isn’t a definitive answer.

Based on previous cases regarding liquor liability, we have observed that courts react differently, depending on details surrounding the alcohol exposure. Courts are split on the meaning of the business of selling or serving alcohol, and often focus on the activities of the insured (not the corporate form). Additionally, some of the factors considered by the courts include permanency of operations involving liquor (fundraiser vs. daily social hour); charge for alcohol; presence of a bartender or manager; license to serve alcohol; and whether the event is open to the public. The courts apply the factors differently, making the outcome of any case difficult to predict.