A policyholder who has Colorado Springs renters insurance called us recently to ask a question. Their child is graduating college, and they want to throw a party. A big one. So naturally, they asked us…
Does renters insurance cover liquor liability for my party? What if someone is over-served and tries to drive home and causes an accident? What’s the best way to protect myself from that risk?
Well, the best way to protect yourself from the risk and to not have to wonder if renters insurance covers liquor liability would be to keep the party moderated.
If I Have A Party, Does Renters Insurance Cover Liquor Liability?
If I over-serve someone at a party and they injure someone, does renters insurance cover my liquor liability? What if i’m charging admission? Learn more with the renters insurance experts…
Does Renters Insurance Cover Liquor Liability?
In a nutshell, renters insurance liability covers you if you negligently cause bodily injury or property damage to another person. In the example cited above, the insured would not be the one causing the injury or damage. They could be held liable, and in theory a renters insurance policy might defend the claim. But, when it comes to risk management, “might” is never a word you want to hear.
Generally speaking, liquor liability isn’t excluded, provided that alcohol is not being sold. Let’s assume for a moment that this concept is as cut and dry as it sounds (it’s not!). If you host a party where there is excessive alcohol consumption and you knew or should have known that someone drank too much, yet you continued to serve them or allow them to be served and they then get into an accident, you can be held liable. Could renters insurance cover liquor liability? Sure, provided it’s strictly social and you’re not charging for admission like certain college parties often do.
However, there’s an inherent problem. Based on the concept of comparative negligence, you are not 100% liable in most states for the damage or injury because you didn’t operate the vehicle. However, there’s a concept commonly known as “but for”. “But for being negligently over-served at the party, I would not have driven drunk,” the driver might say. That doesn’t make you 100% liable, but let’s say it’s split down the middle between you and the driver.
The driver caused a million dollars worth of injury to the occupants of the other vehicle and a pedestrian. Not hard to imagine, with medical costs being what they are. If you’re 50% liable, you’re on the hook for a cool half million. But, there’s a problem. The driver only carries state minimum auto insurance. So he’s on the hook for a half million as well, but his policy will only pay a maximum of $30,000 of liability for bodily injury. In some states, co-defendants to a suit like this one could be held jointly and severally liable for damages. This means that each of you is responsible for the total amount, not just your half.
Will Renters Insurance Cover Liquor Liability In Excess Of Policy Limits?
Renters insurance might very well be able to cover the liability, but if it exceeds the policy limits, then what do you do? Before having a party of this magnitude, consider two things. An umbrella policy can sit on top of your renters insurance and provide additional personal liability protection. Also, there are event liability policies available for a minimal cost that provide exactly the sort of coverage you need.
Insurance is not one size fits all. There is a reason that there are policies tailored to nearly every need, because peoples’ needs vary widely. Effective Coverage can get you the right policy at the right price. Online renters insurance quotes and online umbrella insurance quotes are available as well, just click above!