You’ve finalized the guest list, hired a caterer, lined up entertainment, and planned the perfect décor. But have you considered the risks of hosting an event at your home this summer?
Summer can be the perfect time to host a poolside party, family reunion, charity fundraiser, bridal shower, or wedding at your home. But the larger the guest list, and the more likely those people fall outside your trusted circle, the greater your exposure.
Before you get too far with your summer event planning, it’s important to understand the risks and protect your assets with the right insurance.
Event Incidents Like These Place You at Risk
Consider what could happen during an event you host at your home.
- A guest or vendor could cause damage to your property or to equipment you’ve rented.
- A child could be injured on your backyard playground, and the parents could sue you for medical expenses and additional damages.
- An intoxicated guest could drive home, cause a vehicle crash that results in injuries, and expose you to a social host liability lawsuit.
- You could find expensive jewelry stolen or a priceless piece of art damaged.
- You might need to cancel your event due to an impending hurricane—and discover you’re still liable for some portion of your vendor charges.
A Homeowner’s Policy Leaves Gaps
Even a robust homeowner’s insurance policy won’t cover many of the incidents that could occur during an event at your home.
Homeowner’s policies exclude damage caused by a third party, like a vendor. They don’t provide any protection for event cancellation. And the amount of liability coverage included under a homeowner’s policy is very limited—often just $500,000 per incident. If a guest sustains a significant injury at your home, and they claim loss of future wages, a settlement or judgment could easily exceed that amount.
In addition, it’s best to preserve your homeowner’s insurance for catastrophic property losses, such as substantial damage caused by extreme weather. If you file an event liability claim under your homeowner’s policy, the insurer is likely to increase your premium or could drop your coverage.
Umbrella Liability is Critical for Successful Families, But It’s Not Enough
If you have significant assets—such as a million-dollar primary home, a secondary home, or a large investment portfolio—a personal umbrella liability policy is a must. This coverage provides added protection on top of the liability limits included in your auto and homeowner’s policies.
However, an umbrella policy isn’t sufficient to cover the many risks involved when you host an event at home. Umbrella insurance only covers liability—not exposures like event cancellation or damage caused by a third party. And much like homeowner’s insurance, it’s prudent to preserve your umbrella insurance for claims you can’t make under another policy. This approach preserves the loss history on your umbrella policy, reducing the odds of a major premium hike or dropped coverage.
Special Event Coverage is Essential for At-Home Events
If property insurance and umbrella liability coverage aren’t sufficient protection for at-home gatherings, what’s the right event insurance for homeowners who host events on their property? To protect your assets, you need special event insurance.
Event Cancellation
This coverage is vital if you’re hosting a major event along the East Coast during hurricane season. But severe weather and other risks can jeopardize your event, no matter where you live. If you need to cancel or postpone for a covered reason, the policy allows you to recoup lost expenses like deposits or other costs you’re obligated to pay under your vendor contracts. Note that post-COVID, infectious disease is now excluded as a covered peril under these policies.
Event Liability/Liquor Liability
A special event policy often includes liability coverage to protect you if a guest or vendor is injured or causes damage to your property. If you plan to serve alcohol at your event, it’s best to add liquor liability coverage, which is offered as an add-on to special event insurance. Sometimes called social host liability, this must-have coverage protects against claims that you served underage drinkers or allowed an intoxicated guest to drive home, and that individual caused a vehicle crash that resulted in an injury or fatality.
It’s important to understand the social host liability laws in your area. In some states, the host can be charged both civilly and criminally for certain incidents involving alcohol served at their home. The more comprehensive the social host liability law in your state, the higher the limits you should purchase on your event liability policy.
Be Sure to Protect Your Valuables
Opening your home to a social event also opens the door to your valuables being stolen or damaged. Of course, you can place small items like expensive jewelry in a safe. And you can attempt to restrict access to certain areas of your home with barriers or signage. But if you have a collection of fine art, rare wines, or other valuables that aren’t easy to move out of sight and out of reach, you need proper insurance to protect those assets.
Purchasing a separate valuables or collections policy is typically preferable to adding an endorsement to your homeowner’s insurance, for two reasons:
- Stand-alone policies tend to provide greater protection than endorsements, including higher limits.
- If you can file a valuables claim against a stand-alone policy, you’ll preserve the loss history on your homeowner’s insurance.
Your Vendors Need Insurance, Too
Every vendor that provides a service for your event should have their own liability insurance (including liquor liability, if they’re serving alcohol). Your vendors should also carry workers’ compensation insurance to cover claims that one of their employees was injured while working your event.
Before finalizing any service contracts, confirm that your vendors have liability coverage and worker’s compensation coverage in place. Always ask to see their certificates of insurance.
And keep in mind: vendor insurance isn’t sufficient to cover all the possible scenarios for an at-home event. For example, if your negligence contributes to a worker’s injuries, the employee could file a personal liability lawsuit against you. In a case like this, you would need a robust special event policy or homeowner’s policy to protect your assets.
Consult with the Personal Risk Specialists at B. F. Saul Insurance
To host your summer event at home with confidence, lean on the expertise of an independent insurance advisor like B. F. Saul Insurance.
Our personal insurance team has extensive experience helping individuals and families with significant assets protect their financial interests with the right coverage. We’ll talk through the specifics of your upcoming event, obtain all the information we need to understand your risk exposure, and help you obtain the right coverage.
Before you host an event at home, schedule a call with a B. F. Saul personal insurance specialist to learn how we can help protect your assets.
