IIAA Advises Consumers, Employers On Party Protection

N/Adma got run over by a reindeer, you'd better hope the reindeer wasn't drinking at your holiday party. In many states—whether you are an individual or an employer—you could be held liable for the injuries of both parties, according to the <%=company%> (IIAA).

A social host's liability when serving alcohol to guests is no joking matter. Many courts have found non-commercial hosts liable for the damages their party guests cause as a result of consuming alcohol at their social gatherings and then driving motor vehicles, and as many as 17 states have enacted statutes that can be interpreted as mandating non-commercial social host liability.

In short, in many states, if a guest or third party is injured in an accident that is related to alcohol consumption, and the drinking can be linked to you, you could be held responsible for the payment of medical bills, vehicle repair costs, lost time from work and—in the worst case—claims for wrongful death resulting in huge monetary settlements.

"It's easy to forget the serious responsibilities you take on by hosting a party in the midst of the hectic holiday season, but no one wants a tragedy to mar 'the most wonderful time of the year,'" says Todd Muller, IIAA's assistant vice president for Consumer and Technical Affairs. "Drunk driving is a major problem during this season. And serving up a little too much holiday cheer may lead to being served a lawsuit, or worse, if you're not careful."

When hosting a holiday party, individuals should look to the liability portion of their homeowners or renters insurance policy to provide them protection if they are sued and found liable for an accident involving a guest who drank at their home. For the frequent party host, a personal "umbrella" liability policy—providing $1 million or more in additional coverage over the limit of a standard homeowners or renters policy—may be a prudent move. Either way, consumers should regularly review their liability coverage limits to ensure they are adequately covered should an accident occur.

Employers need to make sure their comprehensive general liability (CGL) policy provides them coverage for third party liquor liability through a special endorsement, or they should purchase special event coverage or a separate liquor liability policy before hosting a holiday office party.

Some businesses may want to take additional precautions as well, including limiting alcoholic beverages. But beware: Taking steps, such as instituting a cash bar, may not ease the problem. Charging employees for alcoholic beverages in an effort to keep drinking down at parties hosted in the office or at the boss' home may not always be the best solution for businesses, Muller cautions.

"It's important for businesses to remember that once they charge a fee for alcohol, they have technically entered the alcohol sales business, even if only for one night," Muller notes. "That carries with it requirements for a liquor license and an array of special liability protection needs. It by no means lets these employers off the hook."

To prevent holiday party accidents and protect yourself or your business:

• Limit your guest list to those you know.
• Host your party at a restaurant or bar that has a liquor license, rather than in a home or office.
• Provide filling food for guests and alternative non-alcoholic beverages.
• Schedule entertainment or activities that do not involve alcohol.
• Arrange transportation or overnight accommodations for those who cannot or should not drive home.
• Stop serving alcohol at least one hour before the party is scheduled to end.
• Do not serve guests who are visibly intoxicated.
• Consider hiring an off-duty police officer to discretely monitor guests' sobriety or handle any alcohol-related problems as guests leave.
• Stay alert, always remembering your responsibilities as a host.
• Review your insurance policy with your agent before the event to ensure that you have the proper liability coverage.