‘Tis the season for parties! You’ve planned the menu, decorated your home and invited the guests, but have you checked your insurance policy to ensure you’re properly covered?
In an article from Bankrate.com, Karen Kroll suggests when reviewing your current policy to make sure the policy doesn’t exclude incidents that arise, even in part, from serving alcohol. There are many specific exclusions on policies, and if you haven’t reviewed your policy, alcohol could very well be one of them.
If you don’t already have one, you may want to consider obtaining an umbrella liability policy. These are policies that supplement your homeowners coverage. Say that your homeowners coverage limit is $300,000. An umbrella liability policy would kick in once that $300,000 is used up. Umbrella policies typically start at $1 million in coverage for a rather modest premium, and go up from there.
The amount is calculated in addition to the coverage you have under your homeowners policy. If your homeowners liability coverage is $300,000, and you have a $1 million umbrella policy, your total coverage is $1.3 million. While this may sound like quite a bit of money, given the legal costs and possible jury awards in drunk driving lawsuits, it could go quite quickly.
Who should think about umbrella policies? While it’s difficult to state a precise income or asset level at which an umbrella policy makes sense, if you’ve acquired a measurable amount of assets, you’ll definitely want to consider one. If your annual income has hit the six-figure range, you’ll also want to look into them.
Fortunately, obtaining an umbrella policy doesn’t have to cost an arm and a leg. Annual premiums usually range from $200 to $600.
A couple of things to keep in mind. First, make sure that you don’t have a gap between the coverage amount provided by your homeowners policy, and that provided by your umbrella policy.
For instance, if your umbrella policy covers costs above $300,000, but your homeowners insurance limits its coverage to $250,000, you would have to make up the $50,000 difference, should you file a claim. This is more likely to happen if you’re using different carriers for your homeowners and your umbrella policies.
In addition, purchasing an umbrella policy doesn’t eliminate your need to remain a responsible host. Most importantly, you don’t want to serve alcohol to anyone under 21. Another point to keep in mind: Some policies may not provide coverage if you knowingly serve an individual who already is acting intoxicated.
If it’s appropriate, you may want to hire a professional catering firm to man the bar. Their experience serving alcohol should put them in a better position to determine who is reaching their drinking limit. And, some guests may be more receptive to a stranger cutting them off, rather than their friend or family member.
However, you can’t assume that engaging a caterer or bartender gets you off the hook. First of all, you’ll want to verify that the firm is insured. Find out how much insurance coverage they have and whether you can be added to it for the party. Ask to see the actual certificate and even call the insurer to find out if it’s current and what, if any, exclusions apply. Although someone still could come after you, the caterer’s policy would provide some coverage.
What if you own a business and host a holiday get-together at your home or office? For starters, as a matter of good business practice, you already should have an umbrella liability policy for your business, as well as for your home. That’s because if an employee is involved in an alcohol-related crash, you could be sued as an individual and as a company.
Finally, be a responsible host. For some get-togethers, it may be easiest to simply not serve alcohol. If you’re hosting a brunch or lunchtime party, this may be a natural solution.
If you are going to serve alcohol, take a few common-sense precautions:
- Limit your guest list to those you know well.
- Before the festivities get under way, let guests know you’ll provide transportation home if their behavior seems questionable.
- Only serve party-goers who you know are over the legal drinking age of 21.
- Stay sober and serve the drinks yourself, so you know which guests are reaching their limit.
- Have plenty of food available, so guests aren’t drinking on an empty stomach.
- Close the bar at least an hour before people will be leaving.
- If a significant number of young people will be attending a party at which liquor is being consumed, have them turn in their car keys as they enter and only return them when you are confident they have not been drinking.
Finally, if an incident does occur, notify your insurer right away. Some policies will exclude claims if you didn’t provide “timely notice.”
Questions about your homeowners insurance or want more information on quotes for an umbrella policy? Call Herbie Wiles Insurance at 904-829-2201 or email us at Info@HerbieWiles.com.