Graduations, weddings, Memorial Day holiday or just celebrating the warmer weather, party season is upon us. Before you send the invites out for your next bash, make sure you have the proper insurance coverage. How well do you know Host Liquor Liability and what are your coverage limits?
Social Host Liquor Liability is NOT excluded under Personal Liability and Commercial General Liability policies. These liability policies protect you when you host parties and events where alcohol is served and not sold by you. No matter where the party is actually held, your liability insurance goes with you. However, if you rent a location you must add that location to your policy temporarily as an “insured location” for premises liability and medical payments to apply. The act of hiring a caterer to serve food and alcohol does not exclude your host liquor coverage. However, if you cater the event and the venue or caterer sells the alcohol then they assume the liquor liability exposure. You should verify that they have liquor liability insurance by requesting proof of insurance.
- Personally hosted parties – Your personal liability is provided as a coverage component of your Homeowners, Condo, or Tenants (Renters) Insurance policy. Check your liability limit, which can vary from $50,000 up to a max of $500,000. You can increase your limit to the max for a small premium. Because liability awards can be quite significant, we recommend that you consider a personal excess liability (umbrella) policy for at least a $1,000,000 limit. Contact us for a quick quote on a personal umbrella policy.
- Business or office hosted parties – You and your business entity would be insured under a Commercial General Liability policy (or as a section to your Business Owners or Package Policy). Coverage is not excluded for a party you host where alcohol is not sold by you. Check your liability limit which can range from $100,000 to $1,000,000 limit. For increased limits or limits over $1,000,000 please contact us.
- Special Event Liability – If you are hosting a party and don’t have Personal or Commercial Liability coverage then you can purchase a separate policy for Special Event Liability. Contact us for more information.
Sample Cases
You host a graduation party and one inebriated guest negligently causes a serious auto accident on the way home. You are sued. Will your homeowners or auto polices respond? The answer may depend – it’s possible that both, either or neither will respond. New wording in the homeowners policy form removes a very important part of this coverage. The major change is that the policy no longer covers you for the liability arising out of a guest’s use of an auto. This means that there is no longer coverage for your liability arising from a guest drinking too much and getting behind the wheel. Depending on how your insurance program is structured, you may be facing a significant coverage gap.
A jury in a very conservative community handed the host of a graduation party an adverse judgment in excess of $4 million due to an accident related to consumption of alcohol by guests. In another case, there was a $3.5 million jury verdict against a family serving alcohol to teenagers who then had a horrific accident. In both cases insurance was inadequate. In the first instance, the insured had adequate liquid assets to respond; in the second case, liquidation and bankruptcy were necessary, wiping out wealth accumulated over several decades. These were examples where there was insurance coverage, just inadequate limits.
Before you host your next event, contact Rue Insurance, at 800-272-4RUE or www.rueinsurance.com. We can review your coverage and assist in developing a risk management plan.
