Throwing a Party? Cover Your Risk with an Umbrella

March 30, 2018

Many homeowners enjoy throwing parties for holidays or special events. If you're planning a party in the near future, be sure that your homeowners' coverage is adequate and, if it's not, you should consider a personal umbrella policy.

Guests who are injured may need to file an injury claim if their vehicle is damaged, if they fall down or if a pet bites them.

Research shows that about 75% of homeowners who plan social gatherings in their homes do not have a personal umbrella policy. This makes them more vulnerable to lawsuits stemming from guests who suffer injuries.

The same study found that the remainder of the homeowners surveyed did not know what type of coverage they had. This means it is likely that the percentage of homeowners who do not have adequate coverage is even higher.

But a personal umbrella policy is necessary to protect against lawsuits.


The booze risk

Although dog bites and falls are common, alcohol is one liability issue that is often overlooked, but is very risky.

In 30 states, homeowners may be responsible for damages arising from any auto accidents caused by their intoxicated guests who choose to drive home.

In one survey, more than 50% of homeowners said they agreed that party hosts should be responsible for their guests' safety. However, very few took any steps to obtain adequate insurance coverage.

The study concluded that most people avoid purchasing a personal umbrella policy because they are under the impression that their regular homeowners' coverage provides adequate protection for such matters. However, since many lawsuits include large awards and medical costs, it is easy for one incident to exceed the homeowners' liability limits.


If you're throwing a party, you should heed the following suggestions:

  • Instead of having the party at a personal residence, reserve space in a restaurant or bar that has a liquor license.
  • Ensure that there are filling food options and non-alcoholic beverage choices available.
  • To avoid trouble from party-crashing strangers, limit invitations to friends or familiar people.
  • For guests who appear drunk, provide transportation or overnight accommodation.
  • Avoid serving alcohol to guests who appear intoxicated.
  • Plan activities that draw attention away from drinking alcohol.
  • If several guests are expected at a home party, consider hiring an off-duty police officer to handle problems and discreetly monitor guests' alcohol consumption.
  • Take away all alcoholic drinks at least one hour before the party is supposed to end.

Check your protection
If you're not sure whether you have sufficient coverage, or if you don't understand your liability and options, contact us to discuss your coverage before throwing a party.

Here's what personal umbrella insurance is and how it works: Personal umbrella coverage is simply a $1 million liability policy (liability pays for bodily injury or property damage to others).

It sits and waits until one of the underlying policies is maxed out. The most common underlying policies are your car and home insurance policies.

Here's a hypothetical situation:
Robert California has a homeowners' policy with a $300,000 liability limit. He threw a big party and one of the guests drank too much, drove and crashed into another vehicle, injuring several of its occupants. Let's say that his homeowners' policy pays the $300,000 (very safe assumption), but the settlement is $800,000. Where does the remaining $500,000 come from?"

If you said the umbrella policy, you would be correct.


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