Social Host and Liquor Liability Coverage
POSTED ON FEBRUARY 7, 2023
The Super Bowl is right around the corner and many of us are excited about hosting a party to celebrate. Most people know that businesses can be held liable for injuries that may occur if a patron is overserved, but did you know that individuals can be as well?
Social host liability and liquor liability are the legal terms for the criminal and civil responsibility of a person or business who furnishes liquor to a guest. Understandably, social host liability can have severe consequences for your average party host. Read along and find out what is needed and available to protect yourself, your business, and your valuable assets.
For Your Business
Most people assume that businesses will be held liable for patrons who are overserved and cause property damage or bodily harm. Therefore, it’s crucial that businesses have the proper coverage. Companies in the business of making, selling or serving liquor are often required to have liquor liability coverage. For most business this coverage can be included in their General Liability policy.
Companies that are not in the business of making, selling or serving liquor need to carefully review their policies prior to hosting an event like an office holiday party or a hair salon offering champagne during appointments. Typically, these non-hospitality businesses are covered for liquor liability but there are certain times the coverage is excluded; for example, if an event requires a permit host liquor liability could be excluded. The most important thing for any company to do is review their policy and reach out to your agent to determine if you are covered prior to any events they may host.
For Your Home
Now, let’s review the exposures and options available to individuals who host a Super Bowl party for 25 of their closest friends. In most homeowner policies, liquor liability is not an excluded exposure. This doesn’t mean that they’re automatically covered if someone is overserved at their home and injures someone. It’s important to note there are different homeowner policy forms. It’s crucial for homeowners to know on which form their homeowners policy is written. All you insurance aficionados can scroll to the bottom of this article to read the actual policy language.
Typically, all the homeowner policy forms provide coverage up to the policy limits if Joe hosts a party at which his friend Jill drinks too much and injures herself or someone else. Homeowners policies have personal liability for when someone is found legally liable for:
- His/her own direct actions
- Negligent supervision/vicarious liability for actions of others
- Contractual assumption of another’s responsibility
If Jill drank too much, got in her own car and was at-fault in an accident where she caused bodily injury or property damage, Joe’s policy could potentially still provide coverage based on the policy form on which Joe’s homeowner policy is written. The older and more commonly used homeowner policy has a motor vehicle exclusion, but it would not apply in this situation since Joe does not own the vehicle. Once again, the actual policy mumbo jumbo is at the bottom of this blog.
The new versions of the standard homeowner policy form DO apply the motor vehicle exclusion. This policy changed the wording to make “motor vehicles” a more comprehensive definition which now includes ALL bodily injury or property damage arising out of ANY motor vehicle regardless of WHO owns it or WHO drives it.
At the end of the day, have fun and enjoy the big game with your friends and family, but do it safely and responsibly. Please contact your Account Manager here at Aronson Insurance or call us at 781.444.3050 to review your account or discuss any social host or liquor liability questions you may have.
Insurance mumbo jumbo:
The ISO HO-91 states:
COVERAGE E – Personal Liability
If a claim is made or a suit is brought against an “insured” for damages because of “bodily injury” or “property damage” caused by an “occurrence” to which this coverage applies, we will:
- Pay up to our limit of liability for the damages for which the “insured” is legally liable. Damages include prejudgment interest awarded against the “insured”; and
- Provide a defense at our expense by counsel of our choice, even if the suit is groundless, false, or fraudulent. We may investigate and settle any claim or suit that we decide is appropriate. Our duty to settle or defend ends when the amount we pay for damages resulting from the “occurrence” equals our limit of liability.
The ISO HO-11 exclusion reads as follows:
- Coverage E – Personal Liability and Coverage F – Medical Payments to Others do not apply to “bodily injury” or “property damage”:
… - Arising out of:
(1) The ownership, maintenance, use, loading or unloading of motor vehicles or all other motorized land conveyances, including trailers, owned or operated by or rented or loaned to an “insured”.
(2) The entrustment by an “insured” of a motor vehicle or any other motorized land conveyance to any person; or
(3) Vicarious liability, whether or not statutorily imposed, for the actions of a child or minor using a conveyance excluded in paragraph (1) or (2) above.