You may have heard about the law that holds bars and liquor stores liable for their customers’ actions after being served alcohol at their place of business. If the patron injures or causes death to someone, the business can be sued. This is called “Dram Shop Liability.” Most states have statutory provisions that allow licensed establishments to be held liable for selling or serving alcohol to individuals who cause injuries or death as a result of their intoxication. Laws vary state by state and some laws are based on whether the individual who was furnished alcohol is a minor.
But did you know that many of these same concerns caused the creation of laws that apply to private hosts and their responsibility for guests’ behavior at and immediately after private social events? “Social host liability” is the legal term for the criminal and civil responsibility of a person who furnishes liquor to a guest.
✤ Fun Fact: 30 percent of American adults do not drink alcohol ✤
Whereas your homeowner’s insurance usually provides some liquor liability coverage, the limits are typically $100,000 to $300,000. Depending on your assets, this might not be enough. Before planning a party in your home, speak to your insurance professional to review your homeowner’s coverage for any exclusions, conditions or limitations your policy might have that would affect your social liability risk. The liability coverage provided by your homeowner’s or renter’s insurance omits intentional or criminal acts, so if you knowingly provide alcohol to a minor or you knew your drunk party guest was going to leave your house and get behind the wheel, your coverage would not apply. Most homeowner’s insurance policies also exclude punitive damages, so even if your legal costs were covered, if a jury ordered you to pay punitive damages to the third party, your insurance would not pay out.
✤Another 30 percent consume, on average, less than 1 drink per week✤
If you host a lot of parties, find out if your policy provides adequate coverage. Adding an umbrella policy that includes host and liquor liability is another option to consider. A third option is to purchase special event insurance that includes liquor liability. You still wouldn’t be covered for obviously criminal or negligent acts (i.e., giving drinks to a minor, or knowingly putting your drunk friend behind the wheel,) but this insurance would cover your legal costs and medical payment payouts if one of your guests hurts a third party. Depending on the size of your event, special event insurance can cost a few hundred dollars but if your party is big enough, having the extra liability coverage may make sense. (For example, many people purchase special event insurance for weddings.)
✤ The top 10 percent consume an average of 74 drinks per week ✤
As an alternative, you may want to consider hosting your party at a restaurant or bar with a liquor license. This will help minimize liquor liability risks.
| Photo by Isabella Mendes from Pexels
The University of Rochester Medical Center’s article on Keeping Party Drinking Under Control offers advice on drinking responsibly and tips on throwing a party. Here are a few takeaways from the article to help you and your guests stay safe when you host your next get-together:
- Stay sober. The only way you can act responsibly is to keep a clear head
- If you plan to drink at your own party, hire a professional bartender who is trained to recognize intoxicated people and stop them from driving.
- Serve nonalcoholic beer and wine and other nonalcoholic beverages.
- Offer appealing options to liquor. Make a special nonalcoholic drink.
- Serve food along with liquor.
- Don’t let guests mix their own drinks. You lose control of the quantity served.
- Stop serving alcohol 1 to 2 hours before the party ends.
- Don’t let someone who is drunk get behind the wheel, no matter how much he or she protests.
The holidays are a time for merriment and socializing. Enjoy yourself and the company of friends without the worry of potential harm to anyone or risk of liability to yourself. Be a designated driver or make sure your guests have one lined up before the party starts. Uber is another great alternative for getting your friends and family home safely. And encourage everyone to wear their seatbelts.
Alcoholic Beverage Code – State of Texas
Insurance Information Institute
National Institute on Alcohol Abuse and Alcoholism
University of Rochester Medical Center
The Washington Post “Think You Drink A Lot” Chart ✤
Newsweek “About 40 Percent of Americans Drink Too Much”
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An agency relationship is not created by viewing or reading this blog. Examples of protection are not all-inclusive, and policyholders should refer to their policies for full coverage details. ©Smith-Kenyon Insurance Resources, LLC 2018