Does AppleCare cover liquid damage under the "accidental damage' provision?

Hi,

Yes, AppleCare+ does cover damages caused by liquid contact from spills (but not submerged in liquid):

"3.2 Services for Accidental Damage from Handling (“ADH Service”)

If during the Plan Term you submit a valid claim notifying Apple that the Covered Device has failed due to accidental damage from handling resulting from an unexpected and unintentional external event (e.g., drops and damages caused by liquid contact from spills) (“ADH”), Apple will, at its discretion and subject to the service fee described below, either (i) repair the defect using new or previously used Apple genuine parts that have been tested and pass Apple functional requirements, or (ii) exchange the Covered Device with a replacement product that is new or comprised of new and/or previously used Apple genuine parts and has been tested and passed Apple functional requirements."

There is an additional cost of $299.

https://www.apple.com/legal/sales-support/applecare/applecareplus/2205/220606_applecareplusmac_us.pdf

Read ▶︎ Liquid Damage (not covered by warranty). 

Turning on a wet machine can cause more damage and increase the cost of repair. ⚠️

Based on your situation, I recommend service.

Service Checklist:

• Mac service pricing.
• Check AppleCare Coverage.
• Get your Mac ready for service.

Click ▶︎ Start a Service Request. ⚛️

Need more help?

• Call Apple Support at 1-800-APLCARE. 📞
• International Support. 🌐
• Contact Apple Support. 📝
• Chat using Messages. 💬

Click ▶︎ Check Repair Status.

Based on my personal experience with a 2020 MacBook Pro that had an accidental liquid spill, AppleCare+ did cover it as one of the two (yearly) accidental incidents. However, the repair was not free, just at a reduced cost.

To add a bit to Smilin-Brian's comment I second the fact that you should stop using your notebook until it can be examined ... leaving it powered-off. FWIW, the small spill my notebook experienced, resulted in having to get a new logic board, display screen, and touchpad. (... and I did power it off immediately afterwards.)