In the midst of the festive and hectic holiday atmosphere, it is easy to forget the serious responsibility involved with hosting a party at your home or business. In many states, individuals and employers hosting holiday parties can be held liable in cases where a guest or third party is injured in an accident related to alcohol consumption at your event. Hosts have been held responsible for medical bills, vehicle repair costs, lost time from work, and even wrongful death. Trusted Choice® independent insurance agents recommend that those planning to host holiday parties this year review their homeowners, renter’s or comprehensive general liability (CGL) insurance policy and ensure they have adequate liability coverage if sued and found liable for the actions of a guest who drank at their home or business. While all holiday partygoers and hosts alike should be responsible and know their limits, consumers need to acknowledge that most risks cannot be eliminated entirely. But planning ahead and learning about what’s involved in hosting a reception is the best defense. 

Liability Coverage Tips:

• If hosting a holiday party, individuals should look to the liability portion of their homeowners or renters insurance policy to provide them protection if they are sued and found liable for an accident involving a guest who drank at their home.


• Employers need to make sure that their comprehensive general liability (CGL) policy provides them coverage for third-party liquor liability policy before hosting that holiday office party.  

• Charging employees for alcoholic beverages in the home or office may not always be the best solution for business parties. It is important for businesses to remember that once they charge a fee for alcohol, they have technically entered the alcohol sales business, even if only for one night. That carries with it requirements for a liquor license and an array of special liability protection needs. It by no means lets these employers off the hook.” 

• Purchasing a personal “umbrella” liability policy—that can provide $1 million or more in additional coverage over the limit offered by a standard homeowners or renters policy—may be a prudent move for the frequent party host.  This type of coverage can cost as little as $125 a year.

 
Party Host Safety Tips:

• Limit guest list to those you know.

• Provide filling food for guests and alternative non-alcoholic beverages.

• Schedule activities or entertainment not involving alcohol. If the party centers around drinking, it is likely that guests will drink more.

• Arrange transportation or overnight accommodations for those who should not drive home.

• Stop serving alcohol well before the time the party is to end.

• Do not serve guests who are visibly intoxicated.

• Review your insurance policy with your Trusted Choice® independent insurance agent before the event to ensure proper liability coverage.

• Consider hiring an off-duty police officer to discretely monitor guests’ sobriety or handle any alcohol-related problems as guests leave.

• Stay alert yourself, always remembering your responsibilities as a host.

Millions of Americans donate time—their most valuable asset—to serve as a volunteer board member on non-profits, booster clubs, churches, PTAs and civic organizations, just to name a few. The decisions these folks make can have a dramatic impact on their respective organization—and not always for the better. If a volunteer endeavor goes bad, would a volunteer board member have coverage against a lawsuit under his or her homeowner’s policy?

Homeowners’ Insurance
The last thing volunteers want to consider is what would happen if their favored organization file suit against them as a result of their efforts. But it happens, and not infrequently. This does happen, especially when volunteers make decisions that directly influence the finances of an organization. Often, the only insurance these volunteers have to back their efforts is a homeowner’s policy. Unfortunately, this policy may be of little assistance.

The reason homeowners’ policies do not usually cover liability stemming from actions as a volunteer is the nature of the claim. The policy is designed to cover claims of “bodily injury,” such as someone slipping on cracked pavement in your driveway; and/or “property damage,” such as accidentally setting your neighbor’s house ablaze when burning some brush on a windy day.

Claims against board members do not usually involve bodily injury or property damage. Rather, they involve bad decision making that results in financial loss to the organization, such as the decision to invest in an IT system that turns out to be a debacle, costing the organization tremendous time and money.

There is another problem. Homeowners policies do not cover “professional services.” This is important to note, because board members are often asked to serve in a capacity consistent with their profession. For example, a church member who is a CPA may be asked to serve on the church’s board as finance chairman. Even though he is not paid for his services, the “professional services” exclusion under his homeowner’s policy would still apply.

In addition to the above, homeowners policies do not cover claims of personal injury unless this coverage is specifically added. Personal injury insurance is added to the homeowner’s policy to cover claims such as libel, slander, wrongful eviction, and false advertising.

What to Do
Events causing claims are unpredictable. While the reasons shown above prove it’s unlikely, not all claims against volunteer board members are excluded by a homeowners policy. Decisions to purchase personal injury coverage and a personal umbrella policy will increase your ability to find coverage for a suit against you. 

The best method for insuring the actions of board members is for the organization to purchase a directors and officers (D&O) liability policy. These policies are relatively inexpensive for most non-profits. Before volunteering, request information on the organization’s D&O policy. The absence of this insurance leaves you at risk of having no personal insurance to defend a suit brought against you by the organization and should influence your decision to serve.