‘Tis the season for holiday parties, and if you’re hosting one, you are taking on a liability exposure. Do you know what a ‘dram law’ is? Are you familiar with social host liability? If not, what you don’t know could hurt you. Whether you are an individual or an employer, it is important to understand exactly what your homeowners and commercial insurance covers and what it doesn’t. Continue reading to learn more about the risks you could face as a host this season.
According to Mothers Against Drunk Driving, the majority of U.S. states uphold social host liability for intoxicated minors – Arizona being one of them. Some states even uphold social host liability for the actions of intoxicated adults. These laws, known as ‘dram shop laws,’ help to reduce the amount of illegal consumption that occurs at a host’s home and also help raise awareness about the consequences of over-serving a party guest. While it may seem that these laws can cut down on illegal or irresponsible activity, many well-intentioned party hosts can fall victim to them.
For example, imagine that you are hosting a holiday party in your home for 30 of your closest friends and family. You do not plan to serve any liquor, instead opting for alcohol-free punch, eggnog, and coffee. While you are mingling with guests, someone adds vodka to the punch as a practical joke. An underage guest drinks several glasses before driving home, only to be injured in a collision. The guest’s parents, as well as the third-party involved in the accident, bring a liability suit against you for serving alcohol and allowing the minor to leave your home intoxicated.
If the scenario seems far-fetched, it’s not. Social host liability lawsuits are filed every year against homeowners and business owners who host holiday parties. Furthermore, a lawsuit may be filed for the recovery of all alcohol-related damages – not just the ones caused in a car accident. This can include lost wages, medical expenses, legal fees, pain and suffering, and more.
Other Holiday Party Risks
Even without the presence of alcohol, there is the possibility that you could be sued by an employee or another party guest at your company or private holiday party. In fact, you are at risk anytime someone other than yourself is present in your home, or on the premises of your business. You may find yourself liable for an argument between your uncles that becomes physical over a family dinner, as well as for injuries a guest may sustain while after tripping over a water hose in your driveway.
For business owners, the liability can extend to the actions of employees. For example, you may be fully aware that your actions as an employer can lead to a lawsuit. Are you aware, however, that you may also be held liable for the behavior of your party guests? If one of your staff members makes discriminatory remarks against another party-goer, you may be held responsible. Similarly, you may face litigation if an employee reports being sexually harassed at the holiday party.
Offset Holiday Party Risks
Even if you are not held criminally liable for accidents occurring at or as a result of your holiday party, civil lawsuits and judgments can be enough to shut down a business or wipe years of savings. If you plan to host a party this season, take the time to review your homeowners liability or employment practices liability insurance (EPLI). Gaps and exclusions could lead to significant losses for you in some scenarios.