New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

David A. Paterson
Governor

James J. Wrynn
Superintendent

OGC Op. No. 10-09-09

The Office of General Counsel issued the following opinion September 21, 2010 representing the position of the New York State Insurance Department.

Re: Liability Insurance for Establishments Licensed to Sell Liquor at Retail for Consumption on the Premises

Question Presented:

Is an establishment licensed to sell liquor at retail for consumption on the premises required to procure liquor liability insurance?

Conclusion:

No, an establishment licensed to sell liquor at retail for consumption on the premises is not required to procure liquor liability insurance.

Facts:

The inquirer reports that his client sustained certain injuries in a bar that possessed a valid alcohol beverage retail license at the time that his client sustained injury.

Analysis:

The New York State Insurance Law and regulations promulgated thereunder do not require owners of establishments that sell alcohol at retail for consumption on the premises, such as bars, to obtain liquor liability insurance. Nor is the Department aware of any such requirement under any other law of this state. In fact, the Department’s Office of General Counsel (“OGC”) has previously opined that a general liability policy issued to a tavern owner may exclude coverage for liquor liability. See OGC Opinion No. 02-04-30 (April 25, 2002).

Moreover, New York courts have relieved insurers of any duty to defend or indemnify insureds based on liquor liability exclusions in general liability insurance policies, see Handlebar Inc. v. Utica First Insurance Company, 290 A.D.2d 633 (3d Dep’t 2002), even where the insured had also purchased a liquor liability endorsement. See, e.g., Shanna Golden, Ltd. v. Tower Insurance Co., 1 A.D.3d 586 (2d Dep’t 2003) (holding that an assault and battery exclusion in a general liability policy also applied to the liquor liability endorsement and, therefore, relieved the insurer of the duty to defend and indemnify the insured.)

The inquirer was directed to contact the New York State Liquor Authority for further guidance.

For further information you may contact Associate Attorney Pascale Jean-Baptiste at the New York City Office.