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Wednesday, December 26, 2012

Keven Moore on Insurance: Know your liability when planning that New Year’s bash

As your spouse suggests a New Years Eve party this year, I’m sure that many of you are haunted with flashback of some of your “Wish That I Could Take That Moment Back” moments from previous New Years Eve gatherings. While others of you wear those memories as badges of honor, I personally call them as life lessons. Thankfully I don’t have as many of those moments as some of you, but I have had my share.


The one that sticks out the most for me occurred back when I was in college, where just after midnight as I reached for my bottle of cold suds to toast in the New Year, I quickly discovered that I am chugging somebody else’s bottle of Skoal discharge – yeah a 1/2 bottle of it too. I chose the word “discharge’ to minimize your sudden need to gag, and I must say that there were more than a few cookies tossed on that floor that night.


New Year’s Eve is the biggest party night of the year but many professional partiers of this world, purposely chose to stay home that night because of the amateurish risky dangerous behaviors that ensue after such a late night of partying.


Hosting a New Year’s Eve party can be a nice gesture to your friends and family, and a time to relax and enjoy their company, where sometimes alcohol is invited to the party. But first and foremost if you do invite such a mind altering friend, you should make sure that you and your family are protected against liabilities that come from inviting such a troubling component.


Most of us know that liquor liability laws were established to hold restaurants and bars accountable and liable for serving too much alcohol to people who are visibly intoxicated. But what about a private party down in the Man Cave, can you be held liable for someone else’s actions after they drive away from your home intoxicated and happens to kill an innocent person or persons?


In many states, social hosts laws can hold you financially liable for illnesses or accidents resulting from food and drink doled out on their property. It doesn’t matter if your guest lands in the hospital after tripping down a flight of stairs because he is intoxicated, or if he drives away and causes a car crash. If you allow your guest to get drunk, you could find yourself in court and liable for subsequent medical bills, vehicle repair costs, lost-work time or claims from wrongful death potentially costing you a lot more than the price of hors d’oeuvres and decorations.


Even if your guest doesn’t sue you for damages, a person he or she injures in a car crash could. If you have assets to protect and live in a state that makes social hosts liable, it’s important to have adequate liability insurance coverage.


So before issuing out those invitations, I would advise contacting your trusted insurance agent to look into your homeowners or renters policy to see if you are adequately covered should an accident or illness occur during or directly after your New Years Eve bash.


Fortunately many of you will have homeowners insurance with a liability limit up to $100,000 and if a claim is filed against you, your insurer pays for your legal representation and either fights the case in court or settles. But if you were sued for more than the limits of your policy, you’d be responsible for paying the remainder. Most good insurance agents will recommend buying liability coverage between $300,000 and $500,000, and this is well worth the additional costs.


If you have assets to protect, such as a house, investments, 401K funds, college funds you should consider acquiring an umbrella policy to supplement your homeowners policy. Umbrella coverage, which provides liability coverage above and beyond your car and home insurance, typically starts at $1 million. Should one of your drunk guest cause an accident that injures other people, and his drinking is linked to you, those third parties may sue you for negligence too.


Astonishingly, many people are not aware of these laws. A study by a survey by the Independent Insurance Agents & Brokers of America (IIABA) and its local Trusted Choice member agencies learned that one-third of homeowners do not think or do not know if they could be held responsible for an alcohol-related accident in their home.


The harsh truth is that we live in a litigious society and even the best-intentions can result in a very expensive lawsuit that could devastate your family. A lot hinges on what you know or should have known about the intoxication level of your guests, or how hard you tried to find them safe transportation. If somebody has brought their own liquor or drinking out of a flask and you are unaware of this action, that’s different than you pouring them a double and feeding them more drinks, as you wait for the New Year to arrive. If you make an effort to stop a guest from driving drunk, that can make a difference in your liability.


It’s particularly a bigger problem if the guests at your party are underage. If you have someone in your home and you’re providing alcohol to them, you have a responsibility to know that they are 21 or older, and ignorance is not a defensible stance in a court of law.


The simplest way to protect yourself from liability is to not serve alcohol, but if you do here are some additional suggestions to help reduce your risk exposure:


• Transfer your risk exposure by outsource your holiday prep to an insured caterer or restaurant with experienced and trained bartenders.


• If party budget permits consider hosting your party at a restaurant or bar in one of their private rooms.


• Make nonalcoholic beverages available and always serve food. Food helps counter the effects of alcohol.


• Collect car keys at the start of the party and pre-arrange designated drivers.


• If guest begin to show signs of intoxication offer them a non-alcoholic refreshment instead.


• Guard for underage drinkers from sneaking sips and drinks from unattended drinks.


• Schedule social and entertaining activities to take guest’s minds off drinking, and provide food to fill them up after a few toasts.


• Avoid a last call for alcohol and stop serving at least an hour before the expected end to the party.


• Consider hiring an off-duty police officer to check guests for sobriety as they leave.


• After the party, arrange transportation with the local cab company or provide overnight accommodations for those who shouldn’t be driving home. 


• Encourage all your guests to wear seatbelts when they drive home


At a minimum, you have a moral responsibility and a legal one, for your guests’ safety so use common sense. As for me this New Years Eve, I plan on spending it at home with the family, once again toasting apple juice with my 8th grade daughter and wife.


Be Safe My Friends.


Keven Moore is director of Risk Management Services for Roeding Insurance (www.roedinginsurance.com). He has a bachelor’s degree from University of Kentucky, a master’s from Eastern Kentucky University and 25-plus years of experience in the safety and insurance profession. He lives in Lexington with his family and works out of both the Lexington and Northern Kentucky offices. Keven can be reached at kmoore@roeding.com.



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