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There’s nothing quite like gathering with friends and family. Some of life’s best moments happen when loved ones are gathered together. But having people over at your home comes with liability risks. Many hosts may find themselves asking, “Do homeowners insurance policies cover parties?”
What a homeowners policy will and won’t cover depends on what type of policy you have, what optional endorsements you have purchased and what specific incidents occur. Bankrate’s insurance editorial team can help you navigate the ins and outs of home insurance and hosting.
What protections are needed
Relying solely on a standard home policy may not be enough protection for a private party and hosts may want to consider specialized insurance for event liability, which can help fill in coverage gaps. Speaking with a licensed insurance professional to learn more about event insurance options can be helpful, but some of the gaps covered by this type of policy include:
Protection for misbehaving guests
Most standard home insurance policies include some protection for legal liability, which is designed to protect the insured if someone is injured on the property and the host is found at fault, or if the host is at fault for damage to someone else’s property. However, the coverage may not be sufficient. Special event insurance can provide a higher coverage limit for personal liability, although hosts planning to serve alcohol may want to consider liquor liability or host liquor liability insurance, as most event insurance does not specifically cover incidents directly related to alcohol served at the party.
Protection for the venue
Many professional venues carry event insurance to protect the premises and property, and private party hosts might find similar event liability coverage useful. Most home insurance policies provide some protection for the property where the party is being hosted, but looking into additional event liability could be worthwhile. If your event isn’t at your home, some venues may require you to show proof of liability coverage up to a certain amount before they will agree to rent you the space.
Special event insurance often covers associated costs if an event unexpectedly needs to be canceled. Typically, the type of events covered include birthday and anniversary parties, baby showers and other personal events. Events open to the public or bachelor and bachelorette parties are usually not covered.
Protection for serving alcoholic beverages
Many parties involve alcohol, but drinking too much often causes people to make poor decisions. According to the Insurance Information Institute (Triple-I), 43 states have social host liability laws. Under these laws, also known as “Dram Shop Liability,” if someone drinks too much at a party and is arrested while driving under the influence, the host could be held partly liable. Or a person injured by someone who was drinking at a homeowner’s party might be able to sue the party host for serving alcohol.
Special event insurance typically may not fully cover this kind of liability. If you are planning to serve alcohol at a party, you may want to know about the types of coverage available to you. Liquor liability policies add an extra layer of protection for hosts who serve alcohol. These policies come in a few forms:
- Liquor liability insurance: This is an annual or short-term policy for hired professionals who serve alcohol, including bartenders, caterers, chefs and food vendors. Licensed vendors should already carry this type of insurance, but it isn’t available for homeowners or anyone who isn’t professionally serving alcohol. This is a commercial, or business, policy.
- Social host liquor liability insurance: This is a short-term insurance policy designed to provide extra coverage for a party host. Homeowners insurance policies may provide limited coverage for hosts serving alcohol, but you may want to consider more coverage just in case. Most host liquor policies offer coverage for bodily injury or property damage related to alcohol. You may be able to purchase this as a standalone policy or as a rider on your existing home insurance policy.
- Umbrella insurance: Homeowners can also increase their financial protection with an umbrella policy, which typically includes a minimum of $1 million of additional liability coverage on top of liability limits included in your standard home policy and costs less than $300 per year on average in premium.
Potential insurance risks when hosting a party
Many event-related risks can be mitigated before anything happens. Here are a few potential issues to keep in mind when planning an event.
Injuries are more common when many guests are packed into a small space and when alcohol is involved. Most standard home insurance policies come with medical payments coverage, which pays for injuries regardless of fault, and liability coverage, which pays for injuries and legal fees when you are found at fault for a guest’s injuries. If you are hosting a big party, talk to your insurance agent about your coverage limits. You may want to increase them or purchase an umbrella policy for added protection.
Even when alcohol is carefully monitored at a party, underage children might try to sneak a drink, opening the host to risk of being held liable. Talk to the guests at your party to ensure everyone is aware not to serve alcohol to any underage guests. You’ll also want to ensure any open containers are kept in areas that aren’t easily accessible to children. You could face substantial fines and even criminal charges for serving alcohol to minors at a private function in your home.
Drinking and driving
Due to social host liability laws, a host could be held liable for people who drink at the party and then drive. As a host, you have a responsibility to ensure your guests are sobered up and safe to drive home. Gathering up the keys of those who plan to drink might help you control how and when guests leave a party. You could also ensure that each group of guests has a designated driver who abstains from drinking alcohol during the party.
Having multiple people in a private home can lead to property damage, theft and broken personal belongings. Your home insurance policy might pay for these damages if they are over your deductible, assuming that the damage was caused by a covered event. Understanding the insurance perils that your policy covers might be a good step to take before hosting a party.
How to prevent damages when hosting a party
A bit of planning can go a long way toward limiting liability and damage risks when hosting a party. Pay attention to the areas where the event will be held and take note of potential problems. Here are a few preventative measures to consider:
- Offer food and non-alcoholic drinks. Eating food can help to offset the effects of alcohol. Additionally, offering tasty alcohol-free drinks gives people another option to enjoy while reducing the risk of alcohol-related incidents or damage.
- Use a professional bartender. Hiring a professional bartender might help offset the personal liability involved with serving drinks at a party. Professional event bartenders typically carry liability insurance, but you can always ask to see proof of insurance to be sure.
- Serve alcohol from a single source. Even if a professional bartender is not used, alcohol flow can be more easily monitored if it’s only available in one place during an event.
- Encourage ridesharing and designated drivers. If a guest has been drinking, guide them away from driving. Instead, offering ridesharing services or having a designated driver on hand can help guests get home safely. Consider collecting car keys as guests arrive so that it’s easier to ensure everyone’s safety at the end of the party.
- Stop serving alcohol at a certain time. Once it gets late, you can use other drinks to substitute for alcoholic ones to help curb intoxicated driving.
- Offer a place to stay. If it’s obvious that a guest shouldn’t drive when the party ends, offer them a spare room or couch. Reserving a few spots in the house for guests who may become inebriated could be the safest approach. Air beds are also an easy and inexpensive solution.
- Act as a responsible host. Party guests typically follow the host’s lead, so act responsibly and avoid drinking too much. It will also be easier to respond to emergencies or issues with a clear head.
Frequently asked questions
What is the best home insurance company?
A homeowner’s insurance needs can change quite a bit depending on location, home value, home size, and personal possessions, so the best homeowners insurance company will vary by homeowner. Because each company has its own coverage types, discounts, policy features and rates, it helps to shop around to get quotes from a few different providers and compare rates to see which one is best for you.
Does home insurance include personal liability protection?
Personal liability is a common coverage included on home insurance policies. However, liability coverage isn’t always included on home policies. Coverage may be limited or excluded based on your personal rating factors and claims history. Before buying special liability insurance for an event, check with your current provider to see whether your current home insurance policy will cover your needs for the party. Umbrella coverage may also be a good option to provide you with additional liability protection.
Where can I find more information on event insurance policies?
The best sources about event insurance and liability protection are your current home insurer or a licensed insurance professional. Many providers offer event insurance, or their standard home policy might provide adequate coverage for an event. Remember that serving alcohol may require additional coverage, such as host liquor insurance.
How can I be a responsible party host?
The Triple-I offers several tips to help protect yourself and your guests:
- Hire a professional bartender to serve drinks
- Ask guests to choose a designated driver before the party
- Limit your own alcohol intake to monitor others
- Offer alternate drink options and serve food
- Do not pressure guests to drink alcohol
- Restrict minors from having access to alcohol
- Stop serving liquor well before the party ends
- If guests drink too much or appear too tired to drive home, contact a rideshare service