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Vol. 6, Iss. 1
January 11, 2017

Straight-Up Interpretation:
Defining “Furnishing Alcohol” Within Liquor Liability Exclusion

In Harleysville Preferred Ins. Co. v. Exec. Banquet & Conf. Ctr., No. N15C-07-068 FWW (Del. Super. Nov. 21, 2016) the court held that a Liquor Liability exclusion, contained in a commercial general liability policy, precluded coverage to a conference center – even though it was hands-off in many ways when it came to serving liquor – after a patron was served alcohol, left and was struck and killed by a motor vehicle when attempting to cross a street.

The court explained that the conference center, despite another entity having everything to do with pouring the drinks, still furnished alcohol within the terms of the Liquor Liability exclusion. The opinion is brief. The heart of it is this:

“[T]he Exclusion shall be construed according to its ordinary and usual meaning because the word ‘furnish’ is unambiguous in this context. According to Webster’s Concise Dictionary, the word ‘furnish’ means ‘to supply; provide,’ and ‘to supply’ something means ‘to make it available.’ Despite Defendants’ arguments to the contrary, an ordinary reading of these definitions makes clear that furnishing something is not limited to one physically handing something to another. Instead, one can furnish something to another by providing the means for that person to obtain it.

While it is true that Defendants neither physically pour the alcoholic beverages nor hold the liquor license, Defendants are directly responsible for making alcohol available at events. Defendants are in the business of catering social events at the Center, and they advertise their business online. Interested customers, who see the advertisements, contact Defendants to book an event. While booking an event, customers tell Defendants which bar service, if any, that they want, and Defendants provide that service accordingly. Customers do not discuss anything about bar services with Local No. 74, which provides the bartenders. As these facts illustrate, an important part of Defendants’ business is contracting with interested customers about which bar services will be offered at events. Therefore, the Court finds that Defendants are in the business of furnishing alcohol because a part of their business is to arrange for alcohol to be served at events.”

The court here made this look easy for the insurer. And it was the right decision. Besides those definitions of “furnish,” the Liquor Liability exclusion states that it applies only if the insured is “in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages.” Thus, the exclusion contemplates applicability to not just those that actually pour drinks (such as those that are “selling” or “serving”). But it is also not impossible to imagine a court concluding that the conference center didn’t touch the liquor, so to speak, and going in the other direction.

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