“Given the concerns (ok-reality) with the ISO Homeowner policy not responding to Host Liquor claims involving an automobile, does the ISO PAP have any obligation to defend? I ask this question knowing that the ISO PAP will respond to pay for damages for BI or PD to which any ‘insured’ becomes legally responsible because of an auto accident. By definition an insured includes ‘you’ or any ‘family member’ for the ownership, maintenance or use of ANY auto or trailer.
“Given the above, if a homeowner is sued for over-serving a guest who in turn injures a third party in an auto accident, would the homeowner's PAP policy defend and indemnify the homeowner? My question centers around any insured, who is alleged to have caused BI or PD resulting from an auto accident, involving ANY Auto. Many of my colleagues have indicated that the auto must be o/m/u by an insured; however, I do not believe the policy says that. I do not see where the policy says YOUR o/m/u of any auto. It just says o/m/u of ANY auto, as long as there is an auto accident that results in BI or PD for which any insured is legally responsible. May I have your thoughts/clarification on this issue?
“One last thought...if the PAP does provide host liquor coverage, why have we not seen lots of auto carriers responding to these host liquor claims in the past 20 years? Nor have I seen an HO carrier seek contribution from the PAP carrier either?”
You are correct IF you're talking about the ISO PAP. All bets are off with any other PAP. In fact, someone emailed me with a claim scenario right after we got your question that involved the auto policy of a carrier that advertises very heavily on TV and elsewhere. In the claim scenario, which could easily be high six figures or more, the ISO PAP clearly covers it but the policy in question just as clearly does not and, thus, the claim denial.
Coverage under the ISO PAP is very broad, far broader than many auto policies that advertise heavily on TV or that are available in the nonstandard market. The ISO policy used to be an industry "standard" form...now it's more like the 'Cadillac' of auto coverage.
As long as no exclusion applies, you and resident family members are covered for the legal liability you are charged with for the use of ANY auto. Period. There is no requirement that you or family members be directly involved in the operation or maintenance of the vehicle, only that youi are being charged with liability for the accident.
With regard to your last question, neither the ISO PAP nor ISO HO policies provide "host liquor liability" coverage. That term appears nowhere in the policies. Both provide broad liability coverage and, if not excluded, there is coverage. The ISO PAP provides coverage for auto accidents regardless of the (nonexcluded) reason why they happened.
As long as either HO or PAP respond, I don't know that anyone cares other than the subrogatiion unit if they're different carriers. What goes on behind the scenes or internally, especially within the carrier, I don't know.
The bottom line is, carry HO, PAP, and PUP with the same company and you have little or nothing to worry about if they're ISO standard forms.
In addition, while ISO attempted to strengthen the Homeowners policy auto exclusion with regard to host liquor exposures, even they concede there is case law that might find coverage there.
This is a good example of why it's important to have HO and PAP coverages in the same carrier so you don't get into finger pointing in this type of situation. Then make sure there's an umbrella to seal the deal.
Updated: February 26, 2016
Last Updated: January 6, 2025
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