by Lars Rittmann, Commercial Insurance Expert
Summer, the season of golf tournaments, barbecues, stag and does and other festivities . Many of these events include the consumption of alcohol, which can expose businesses, owners and individuals alike to liability issues beyond the scope of their premises or control. Anyone that serves, supplies, provides or makes alcohol available to another who, in turn, becomes intoxicated can be held accountable if that person injures themselves or another. The server, or host, can be held civilly liable for the injured persons. Injured persons can also claim financial compensation appropriate with the injuries they have suffered.
There are three types of hosts. 1) Commercial hosts, 2) Social hosts, and 3) Employers as hosts.
Commercial hosts, bars and restaurants, are expected to follow detailed statutory requirements when serving alcohol to customers. A Commercial host has insurance specific to the risk of serving alcohol to consumers.
Related Read: What Kind of Liability Coverage Does Your Business Need?
Social hosts are people that host parties in their residence or cottage. The law is specific about how liability can be applied to a social host. For example what if a guest left your party and killed someone on their way home? Potentially, you could be found negligent in your duties as host. At the very least you could be drawn into a lengthy and costly lawsuit. Today most homeowners and Tenants have at least $1 million liability coverage attached to their homeowners, condo or tenant’s policy. This amount of coverage is referred to as personal liability insurance and offers coverage worldwide. With court awards going higher and higher $1 million might not be enough.
The final type of host is the Employer as host for a Christmas party or Golf Tournament. Liability has been imposed on employers in Ontario for intoxicated employees causing accidents. An employer was recently found 25% liable in a case where the employee sustained injuries in an automobile accident and the court granted judgment to the employee for $288,104. There are ways for employers to mitigate the possibility of alcohol related claims.
- Provide safe transportation for employees
- Hosting the event at a third party alcohol licenced establishment
- Provide non-alcoholic drinks and food for the employees.
These steps will never completely absolve an employer of liability when alcohol is served and consumed. A claim of this nature can be covered under the commercial general liability (CGL) policy provided it isnʼt excluded. Although the CGL can pick up a claim for alcohol liability, its intent was never to cover such a risk. A claim for a business under the CGL can mean increased premiums for the business insurance or worse getting the insurance policy cancelled for gross negligence.
A Party Alcohol Liability Policy (PAL) is the Way to Go!
A PAL policy will cover the event and any subsequent Bodily Injury and Property Damage claims. The cost for this kind of policy is reasonable. A PAL policy is a standalone coverage for risks that are associated with alcohol and includes CGL and Host Liquor Liability protection. The PAL policy is available to any one that is hosting a party, stag and doe, wedding, company Golf tournament, etc. It can cover liability for injuries and damages to venue and guests. The best part of a PAL policy is that it keeps your current insurance policy free from claims.
For more information on Party Alcohol Liability policies or to get a quote contact Lars Rittmann.
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