Most companies have the occasional function which may include the opportunity for the staff and their guests to enjoy some alcoholic beverages. This creates an exposure know as host liquor liability.
Why is it important for your business to cover ‘Host liquor liability’ during company functions and what is host liquor liability?
‘Host Liquor liability’ is liability for bodily injury (BI) or property damage (PD) arising out of the serving or distribution of alcoholic beverages by a party not engaged in this activity as a business enterprise. Host liquor liability exposures are insurable under standard general liability policies.
While some general liability policies may respond to events such as fundraising, BBQ’s, staff appreciation, etc… The questions remain will it respond? Is this a risk you’re willing to undertake? Given the huge exposure and the minimal cost to protect your liability policy, a stand alone ‘Host liquor liability’ policy should be on your radar as this is a wise investment. You become the ‘host’ when you are serving or providing the alcohol. Liability can even result from just allowing the consumption of alcoholic beverages at a staff function. You should check with your general insurance policy prior to your event as the policy may not automatically extend to such functions.
There are added benefits of a stand alone host liquor policy as these are usually short term one time event coverage, adding an additional insured such as venue is simplified. If you rely on your business general liability policy you will need a release of interest or have to wait until renewal to remove this additional insured from your policy.
You need to ensure that your broker is aware of all activities and operations of your business including events where you may host liquor. Avoid compromising future premiums or insurability of the general liability due to a special event incident.