Posted : 05/24/2012
A big bash in the backyard: check your liability
It could be that your daughter is tying the knot with her beau this summer and you're expecting about 50 people for an intimate affair. Or maybe you're hosting your neighborhood association's festivities in your yard. Talk to your agent about liability concerns, especially if you'll be serving alcohol. Know that "social liability" is generally covered by your homeowners insurance, but double check with your insurance company to be sure. Social host liability laws vary among states, but most offer an injured person, such as a victim of a drunk driver, a way to sue the person who served alcohol. Criminal charges might also apply.
Usually, home insurance provides some liquor liability coverage, but it's typically limited to $100,000 to $300,000, which may not be enough. Whatever the special occasion, obtaining an umbrella policy is a good idea because it offers higher liability limits. (See: "How umbrella policies can benefit you.")
If you're planning to rent tents and hire caterers, consider purchasing event insurance in case you need to cancel the event. If you're using a caterer, get a copy of the certificate of insurance and ask about any coverage limits, says Sloan. You might also want to hire security for out-of-control partygoers.
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