How does a general liability policy respond when a contractor's Christmas party attendee causes harm to another?

A general liability policy typically provides coverage for bodily injury or property damage that results from the insured's operations or events related to their business. In the context of a contractor's Christmas party, the policy may cover incidents that occur during the event, but there are nuances regarding specific circumstances.

The correct understanding revolves around the principle of whether liquor is being served at the party. Many general liability policies have specific exclusions for incidents arising from the serving of alcohol or include conditions under which coverage applies. If alcohol is being served and the attendee causes harm, the policy might not provide coverage due to potential liability issues connected with alcohol consumption.

Thus, the statement that coverage exists only if serving liquor is not involved accurately reflects the policy's conditional nature. This is because when alcohol is involved, there is a higher risk of incidents occurring, which could lead to exclusions or limitations in the coverage regarding the event.

The other options indicate an absolute response to coverage without consideration of specific factors, which is not typically aligned with how general liability policies operate.