Parties hit their peak during the holiday season. Yet few hosts may be aware of the penalties they could face if a guest leaves their party and is involved in a drunk-driving crime. Here are some of the liability issues you need to consider if you plan on throwing a holiday bash.
As holiday revelers gear up to celebrate the season with families and friends or business associates, an estimated 47 million Americans are expected to host festive gatherings in their homes where they’ll be serving alcohol. But most are in denial about the liability they could face if a guest who has imbibed their beer and booze is involved in a car accident on the way home.
“In over half the states in this country, if you have a party and one of your guests gets very drunk and then goes out and hurts or kills somebody you can be held legally responsible,” said Jeanne Salvatore at the Insurance Information Institute.
Thirty one states, including New Hampshire, New Jersey and New Mexico, have laws and/or court precedents that hold so-called “social hosts” who serve alcholic beverages liable as a third party to drunk-driving crimes.
Yet according to a new survey by the Independent Insurance Agents and Brokers of America, whether it’s a family gathering or business party at the home, most hosts aren’t aware they could be held liable and don’t know if they have adequate insurance coverage.
“Over 85 percent of the people haven’t checked,” said Dave Evans, vice president of retirement and financial planning at the IIABA. “It’s not even on their radar. They’re thinking about what they’re serving and what food, they haven’t thought about what the implications will be if someone has an accident on the way home and they’ve been drinking.”
The best way to avoid liablity is to just use common sense. To avoid accidents after a party:
- Limit the amount of alcohol that’s served.
- Make sure there is enough food.
- Monitor guests as they leave your home.
- Pay for a cab or have them drive home with a sober guest if they’re drunk.
But even if someone seems sober after a drink or two, you could be liable if they’re involved in an accident.
“That’s why having coverage through homeowners’ insurance and through renters coverage and possibly an umbrella policy is the smart way to make sure you can come through the holidays and start the new year the right way,” Evans said.
More than two thirds of renters don’t have renters insurance, and many homeowners don’t have umbrella insurance either.
Even if you don’t currently have an umbrella policy, you still have time. If you buy coverage, it’ll usually be effective within a day or so.
If you decide to get umbrella coverage, expect to pay between $100 and $300 a year for $1 million worth of coverage. And you may be able to pay for part of the premium by scaling back on automobile liability coverage.