ALEXANDRIA, Va., December 2—This holiday season more than 47 million Americans will be hosting parties in their homes at which they will be serving alcohol, but most are in denial about the liability they could face if a guest is involved in an accident on the way home, a new independent consumer survey conducted for the Independent Insurance Agents & Brokers of America (IIABA) has determined.
Unfortunately, the majority of these social hosts mistakenly believe they should not be held liable if someone who drank alcohol at their party is involved in an auto accident after leaving. An overwhelming number of these party-givers are NOT reviewing their home insurance policies ahead of time to ensure they have adequate liability coverage in the event they are sued and found liable for the actions of a guest who drank at their party.
Such neglect invites major problems to your party, says IIABA and its Trusted Choice agencies, because 31 states have laws or court precedents that hold social host alcoholic beverage servers liable as a third party to drunken driving crimes (source: Insurance Information Institute; chart available—see footnote).
“The general population apparently needs more information about social host liability issues, and all people need to be much more conscious about making sure they have proper liability coverage before hosting parties in their homes,” says Madelyn Flannagan, IIABA vice president of education and research. “If people are thinking these types of lawsuits can’t happen to them, they need to reconsider their vulnerability.”
The national consumer telephone survey of more than 1,000 people was conducted for IIABA in November by International Communications Research (ICR)—an independent survey firm based in Media, Pa.
Holiday parties can range from family events and social gatherings with friends to business parties hosted by the boss in his or her home. In some cases party hosts know all of the guests personally, but often times they do not and cannot be assured that every guest will behave responsibly.
When the IIABA survey asked party hosts if they should be held liable when someone who drank at their home party is involved in an auto accident after leaving, less than one-third (28.8 percent) answered yes. Interestingly, the largest category of survey participants believing they are NOT liable in these instances is those with household incomes of more than $75,000 per year (69.2 percent answered no).
A whopping 86.8 percent of those surveyed answered “no” or “don’t know” when asked whether or not they review their insurance coverage or check with their agent to ensure they have adequate liability coverage in the event they are sued and found liable for the actions of a guest who drank alcohol at their party. Once again, those with household incomes above $75,000 most overwhelmingly answered no (90.6 percent).
Ironically, 39.2 percent of the population with incomes greater than $75,000 will be hosting a social or business party in their home during the upcoming holiday season, the survey found—by far the highest percentage of any income category.
“Perhaps those with higher incomes are not concerned because they think they have the money and resources to fight such charges in court,” Flannagan notes. “However, most Americans are not wealthy enough to afford all the legal fees involved in addition to the lawsuit damages if found guilty. We’re talking payment of medical bills, vehicle repair costs, lost time from work and—worst case scenario—claims for wrongful death resulting in huge monetary settlements.”
Meanwhile, a different IIABA survey conducted earlier this year uncovered another problem that impacts holiday parties held in rental homes or apartments. Of the more than 81 million people renting homes in the United States, approximately two-thirds do not have renters insurance, leaving those party hosts at even greater risk.
“Without any renters insurance, party hosts have no liability coverage whatsoever, meaning that you are going to have to pay legal fees out of your own pocket if a guest sues you for something as unreasonable as tripping and falling over your doorstep while intoxicated, resulting in an injury,” Flannagan explains.
“The best way to try to avoid a legal mess is, first, make sure you have homeowners and renters insurance and have paid your bill by the due date. When planning the party, carefully review the liability portion of your homeowners or renters insurance policy and contact your agent with questions. Finally, of course, take the necessary safety precautions at your holiday party.”
It is imperative for social hosts to limit distribution and consumption of alcoholic beverages at their parties. They may even want to consider the alternative of hosting their party at a restaurant or bar that has a liquor license, rather than in their home where they become a server of alcoholic beverages and thus susceptible to liability issues.
Otherwise, a smart move for a frequent party host may be to purchase a personal umbrella liability policy that provides $1 million or more in additional coverage over the limit of a standard homeowners or renters insurance policy. This added coverage can cost as little as $150 per year.
Finally, be absolutely sure that everyone drinking at your party is above legal drinking age. Many homeowners or renters policies provide no liability coverage at all in the event you have served alcohol to minors.
The following is a summary of tips to help party hosts protect themselves and prevent holiday party accidents:
Before hosting a party in your home, check your home insurance policy or contact your agent to verify that you have adequate liability coverage.
Before hosting a party in your home, contact your attorney to determine the social host liability laws in your state.
Limit your party guest list to people you know personally.
Be absolutely sure that everyone drinking at your party is above legal drinking age. Many homeowners or renters policies provide no liability coverage at all in the event you have served alcohol to minors.
Avoid self-service bars; serve the drinks yourself so you can monitor each guest’s condition and not serve those who are visibly intoxicated.
Provide alternative non-alcoholic beverages as well as filling food for guests. Empty stomachs lead to higher blood alcohol contents.
Schedule entertainment or activities that do not involve alcohol. If the primary party activities are drinking games, naturally the guests will be drinking more.
Stop serving alcohol at least one hour before the party is scheduled to end.
Arrange transportation or overnight accommodations for those who cannot or should not drive home.
Remain sober yourself, always remembering your responsibilities as a party host.
For especially large parties, consider hiring an off-duty police officer to discretely monitor guests’ sobriety or handle any alcohol-related problems as guests leave.
Homeowners and renters can obtain home insurance or have their insurance questions answered by calling or visiting a Trusted Choice agency in their area. A Trusted Choice agent represents several different insurance companies and can shop around to find consumers the best or most customized insurance policy to meet their needs. A Trusted Choice agency locator is available at www.TrustedChoice.com.
“Of course, there are no guaranteed ways to protect yourself against lawsuits,” Flannagan says. “But accepting the reality that they can happen to you and making sure you have adequate liability protection in your home insurance policy are steps you need to take.
“Our survey clearly shows that most Americans are not putting a little time aside before their party to review insurance coverages or learn more about the social host liability laws in their respective states. Being proactive now can potentially save you from a lawsuit later,” concludes Flannagan.
For additional tips about other holiday and insurance topics, consumers can visit www.TrustedChoice.com or www.independentagent.com.
Founded in 1896, IIABA is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life and health—as well as employee benefit plans and retirement products. Web address: www.independentagent.com.
FOOTNOTE: A complete summary of the survey results (.pdf) and a drunk driving chart(.pdf) identifying which states have laws or court precedents enforcing social host liability are available.