Monday, November 22, 2010

Home for the Holidays: House parties increase liability, lawsuits

Do you plan to host a holiday, New Year’s Eve or football party in the coming months? Please stop to consider the consequences when a guest is injured or, worse yet, if someone overindulges at the punch bowl and later becomes involved in an accident. The fact is we live in a litigious society, so a well-meaning party host can be found liable in court for these incidents and many others.

While we don’t seek to dampen anyone’s holiday enthusiasm, everyone — especially those with considerable assets — needs to think seriously about potential liabilities when hosting a party.

Awareness lacking
Of particular concern are lawsuits related to alcohol consumption. Roughly one-third of homeowners are unaware that they can be held responsible for accidents resulting from an alcohol-related vehicle accident, according to a recent national survey. “It is frightening to see such a lack of knowledge,” said Madelyn Flannagan, vice president for education and research, Independent Insurance Agents & Brokers of America.Hosts are held liable in many states if a guest or any third party is injured in an alcohol- related accident following a party. These incidents often result in liability payments for the injured’s medical bills, vehicle repair costs and claims for wrongful death.

Nobody is immune
Surveys also indicate that nearly half of homeowners believe they are not liable if a guest becomes seriously ill from catered food consumed at their home and 22 percent did not know they could be held responsible if a guest was injured on their property. But in fact, party hosts can be held responsible for tainted food and other injuries; many times the plaintiff only needs an aggressive lawyer and a sympathetic jury.

Nobody is immune from a liability claim. Although some protection is provided by homeowners or renters policies, these could prove inadequate when settling claims. Therefore, we recommend an umbrella policy. The policy amounts usually range from $1-$5 million and typically cover losses beyond what other policies pay, including personal injury lawsuits and liquor law liability. Umbrella policy coverage isn’t tied to your property or vehicle; you are covered wherever you go, although it typically does not cover home-based business activities.

Household employees 
In addition, you need to know that when full- or part-time domestic staff (e.g., housekeeper, cook, nanny) works at the party, they are considered an employee of the host and state laws may require providing them with workers’ compensation insurance in case they are injured on the job. Even if workers’ compensation coverage is not required, it would be a wise decision to purchase a policy because a homeowners policy might not provide coverage.

No single measure can eliminate personal liability when hosting a party. However, the risks can be reduced with a combination of adequate advance planning, common sense, discrete monitoring of guest activities and, of course, taking the steps necessary to properly insure the occasion.

Before the rush of the holiday season, perhaps now is a good time to schedule a comprehensive review of your homeowners insurance program. It takes only a few minutes and requires only a phone call or e-mail to get started. •

For more information, please contact:
Kimberly A. Binder-Lucarelli, CIC
Director of Personal Risk, SVP
216 367-8582  |

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