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Make sure you have the proper insurance for your holiday party

Homeowners, businesses can be held liable when alcohol is served

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The holiday season is time for family gatherings and office parties, but it can also be a liability to those who serve alcohol. That is why party hosts should protect themselves by making sure they have the proper insurance coverage and taking reasonable precautions to prevent any risks, warns the Insurance Information Institute.

Several states have passed laws called "Dram Shop Liability." These laws make it possible to hold those who serve alcohol to an intoxicated or under-age customer responsible for damage or injury. These laws also offer an injured person, such as the victim of a drunk driver, a method to sue the person who served the alcohol. Some of these laws include circumstances where criminal charges may also apply.

Originally, the Dram Shop Liability laws were intended to apply to taverns, bars, and other establishments selling and serving alcohol. The fact is however, "social hosts" (such as those holding a home Halloween party) also have some exposure to the risk of liability for alcohol serving.

"In some states you can be held legally responsible for your guests' actions after they leave your party," said Loretta Worters, vice president of the Insurance Information Institute. "If you are throwing a party where alcohol is served, you have a responsibility to make sure that your guests are capable of driving safely. You don't want to allow anyone who has been drinking to drive home and possibly kill or injure themselves or others on the road."

Worters also noted that when business owners host a holiday party and serve alcohol as part of the festivities, liquor liability would most likely be covered by their commercial general liability policy. "It's best to check with your insurer first," she said, adding, that "if an employee becomes intoxicated and assaults another employee at the party, the incident would likely be excluded under the CGL policy."

How to protect yourself, your business and your assets

If you plan to host a holiday party and serve alcohol, the Insurance Information Institute offers the following tips on how to have a safe and successful party:

  • Encourage guests to pick a designated driver who will refrain from drinking alcoholic beverages so that he or she can drive other guests home.

  • Consider hiring a professional bartender. Most bartenders are trained to recognize signs of intoxication and will limit consumption by partygoers.

  • Be a responsible host/hostess. Limit your own alcohol intake so that you will be better able to judge a person's sobriety.

  • Serve non-alcoholic beverages and always serve food. Food can help counter the effects of alcohol.

  • Do not pressure guests to drink or rush to refill their glasses when empty. And never serve guests who are visibly intoxicated.

  • Stop serving liquor toward the end of the evening and switch to coffee, tea and soft drinks.

  • If guests drink too much or seem too tired to drive home, call a cab or arrange a ride with a sober guest.

"Talk with your insurance agent or company representative about your liability insurance coverage and any exclusions, conditions or limitations your policy might have for this kind of risk," Worters said. "Appropriate liability insurance coverage is necessary. In some cases special event coverage may be available that will cover both liquor liability and other liability exposures specific to the event."

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