Personal Insurance

Spring Flings: Are You Protected?

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The arrival of spring not only brings flowers and warm sunshine but some very popular social events as well. There are proms, graduations, reunions, weddings, fundraisers, hunts, and barbecues; okay, you get the idea. The big question is not how you celebrate but how you can protect yourself when you host a special soirée. Indeed, something as simple as having a get-together can end up quite complicated very quickly. 

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The first thing to consider is who is throwing the party and how your standard insurance applies. Is it a business event or a personal social gathering? Business insurance policies typically include liability for special events, but some exclusions may apply. Personal liability insurance may also provide some assistance but limits can be capped as low as $50,000. When faced with defending a lawsuit or third party damage claims, insurance limits become a huge factor.

The “host” (which includes organizations, volunteers, and/or individuals) of any social event bears a broad range of responsibility and legal risks. The host could be held liable for third party (guests or otherwise) bodily injury or property damage that may arise by way of contracts, government statute, or simply tort liability. Let’s consider these risks and ways to mitigate the liability exposure for the hosts. Note: take care to consider the physical condition and age range of guests when evaluating potential risks.

The main concerns for any event host include the following areas:

Venue

Where will the event take place? Is the party at a private residence or are you leasing space at a local venue? You may be able to transfer some of your risk to the venue operator if appropriately worded in the rental agreement. Be careful! As host you might assume unexpected liabilities in a rental agreement as well. If the event is held at a private residence, the host and property owner assume more responsibility for the condition and activities on the premises.

Food and Beverage

Will there be food or beverages served, and will a caterer provide this service? One bad batch of chicken salad that leaves a number of guests deathly ill can ring up big costs in medical bills and result in the host’s name at the top of a lawsuit. A catering company may alleviate some of the host liabilities; however, like the venue situation, a written contract that outlines responsibilities and insurance requirements for the catering business is recommended.

There’s a list a mile long of things that could go wrong at any given event, all of which you want to be prepared to handle if they happen at yours.

Alcohol-Related Exposures

Will alcohol be served, either compliments of the host or via cash bar? The method of service determines how insurance will respond to claims for damages. When there is a charge for alcohol, a standard liability policy typically excludes any damages resulting from alcohol. Will there be minors at your event? How will you address consumption by minors? You might also consider other calamities involving alcohol consumption at your event like slips/falls, overindulgence, driving under the influence, or feisty tempers.

Entertainment

Will there be contests, games, or live music? All of these carry some exposure of physical impairment or other damages. For instance, a skeet shoot could involve an accidental discharge resulting in significant injuries to a guest. As the host of the event, you may be held liable for the medical bills, lost wages, and other personal damages suffered by the injured guest. While planning, you must consider the exposures of each activity and plan to either assume or mitigate these financial risks.

Transportation

Lastly, will transportation be provided at your event? Who owns the transport vehicle and is insurance already provided? If the host doesn’t own the vehicle, non-owned liability insurance is imperative. According to the National Highway Association, a motor vehicle accident happens every 14 seconds in the United States. In 2013, the average cost per auto accident was around $20,000. Are you prepared to be financially responsible for these exposures related to your event?

There’s a list a mile long of things that could go wrong at any given event, all of which you want to be prepared to handle if they happen at yours. Be sure to contact your legal council and insurance agent to discuss any special events you will be coordinating. Contractual obligations should be reviewed by your legal council, and your insurance agent can help you compare your current insurance limits to expected liabilities. If your coverage is less than adequate, a separate liability policy should be purchased for the event, also called “special event liability insurance.” Premiums can start as low as $150, depending on the nature of the event.

Liz Asmar is a producer and Certified Risk Manager at Stephens & Hobdy Insurance Agency, a Leavitt Group affiliate.