If you are serving liquor to your guests we require insurance for the event. Please read the information below. Your Homeowners Insurance may  or may not cover your event's liability. The information below is provided by ILLINOIS CAUSALITY COMPANY and by HEARTLAND INSURANCE AGENCY. You are encouraged to read this information to make a determination.

To date, the Illinois Supreme Court has found that liability for the serving or furnishing of alcoholic beverages does not apply to social hosts (those not in the business of selling, serving or furnishing alcoholic beverages). Unfortunately, to add to your confusion, trial courts and even an occasional appellate court have found differently. Therefore, you, at a minimum, have an exposure for defense costs to defend yourself from claims or suits that arise out of your activities as a host.

Now that you know your potential exposures to loss, how do you protect yourself? Your question may very

well be - "Don't I already have insurance protection for this activity?" The answer is maybe!

HOMEOWNERS INSURANCE

Discussions concerning the insurance protection afforded by homeowners insurance policies for the serving or furnishing of alcoholic beverages center on the single fact that there is no liquor liability exclusion. While in most cases this is true, there are other issues worthy of consideration.

• First, the limits of insurance for the liability insurance protection may be insufficient to meet the requirements of the facility where the event involving alcoholic beverages is being held. For example, the facility may require a $1,000,000 limit of insurance, but your policy only provides $100,000 liability coverage.

 

• Second, the facility often (or at least should) wants to be named as an additional insured on your homeowners policy. While individual insurers may develop insurer specific endorsements, there is no standard industry endorsement to name a person or organization as an additional insured for any activities exposures. And will the insurer specific endorsement apply to the liability and/or defense of the facility as respects the facility's own direct liability or will the insurance protection be limited to the vicarious liability exposure of the facility for your acts. The insurance protection needed or wanted by the facility may not be provided by your homeowners policy!

• Finally, the homeowners policy is not written specifically to address the exposures created from the Illinois Dram Shop Statute. The terms and conditions of the homeowners policy may not respond to the injuries sustained and recoverable under the Illinois

Dram Shop Statute.

If you are depending upon your homeowners policy to respond to any claim or suit against you involving the sale, service or furnishing of alcoholic beverages, ask an authorized insurance company representative to explain your insurance protection to you. Good advice - get it in writing!

COMMERCIAL GENERAL LIABILITY

Many insurance professionals adhere to the philosophy that the unendorsed general liability policy provides insurance protection for the "host liquor liability expo-sure" of insureds under policies issued to named insureds who are not "in the business of" manufacturing, distributing, selling, servicing or furnishing alcoholic beverages. However, while this is technically correct, caution should be exercised.

An endorsement to the general liability policy may further restrict coverage in the case of nonprofit and other organizations that charge directly or indirectly for alcoholic beverages in connection with fundraising or other organizational activities. This endorsement omits the phrase "in the business of" and preludes insurance protection if the named insured serves or furnishes alcoholic beverages for a charge whether or not such activity requires a license, is for the purpose of financial gain or livelihood OR the named insured furnishes alcoholic beverages without a charge, if a license is required (not necessarily secured) for such activity.

The general liability policy is not written specifically to address the exposures created from the Illinois Dram Shop Statute. The terms and conditions of the policy may not respond to the injuries sustained and recoverable under the Illinois Dram Shop Statute.

If you are depending upon your general liability policy to respond to any claim or suit against you involving the sale, service or furnishing of alcoholic beverages, ask an authorized insurance company representative to explain your insurance protection to you. Good advice - get it in writing!