Winter is here, and another holiday season is just around the corner. For many, that means relaxing and reconnecting with family and friends, not to mention parties and festivities.
However, parties and celebrations heighten dangers and liability risks, particularly for the party hosts. For example, accidents stemming from the overconsumption of alcoholic beverages, the collapse of an overcrowded deck or a slip and fall on icy pavement outside the home can result in serious injury and leave the host liable for millions of dollars in damages.
To mitigate risks, avoid unnecessary dangers and help ensure guests’ safety, there are some simple steps that hosts can take:
· Remove ice from outdoor areas such as stairways, sidewalks and terraces).
· Hire professional bartenders and instruct them to stop serving guests who’ve had enough.
· Have a local car service on standby in case a guest can’t safely drive home.
· Be aware of the load capacity of decks or porches that partygoers will have access to and make sure the structures are in good condition.
· Make sure you have sufficient umbrella liability coverage.
Reminding high-net-worth clients about these liability risks and preventive measures can be an effective way for advisors to strengthen and deepen client relationships.
Now let’s explore these preventative measures in more detail.
Ice Removal
Icy walkways are prevalent dangers during the winter months and can cause significant monetary liabilities if someone slips and gets seriously injured. Moreover, in many municipalities, private property owners are responsible for ensuring the safety of the public sidewalks that are adjacent to their property.
Professional Bartenders
Guests who drive away from a party while drunk pose a serious liability risk to party hosts. If these guests cause an accident, hosts can be held responsible. Damages for accidents involving serious injury can exceed $10 million. The ubiquity of smartphones has made such cases easier to prove: They increase the chance that pictures or videos showing signs of inebriation will be available as evidence of negligence against a party host.
Whether hosting a private party for friends or a more formal gathering such as a charitable event, hiring professional bartenders and providing them with clear instructions on when to stop serving guests can significantly reduce risk.
Taking Away The Keys
Hosts should always have the number of a local car service on hand in case a guest cannot safely drive home. This is especially during the holidays, when guests are often visiting from out of town and might not know the area particularly well. Quickly connecting guests with a car service should be considered a matter not only of liability protection but also of common courtesy.
Clearing The Deck
Just because it’s cold outside doesn’t mean that guests won’t want to step outside for some fresh air. Many guests consider a deck to be a de-facto smoking or phone area, whether a host designates it or not, and an unsteady railing can pose a significant risk to a guest who leans against it absentmindedly.
An even greater risk is the possibility that a larger-than-normal gathering of guests will exceed the deck’s weight limit. In one New Jersey case, more than 10 people had to be hospitalized due to the collapse of an overcrowded deck, embroiling the hosts in litigation for years. Ensuring that deck supports and railings are in good condition (and posting clear signage if they are not) can help hosts to avoid such situations.
The Big Umbrella
Home insurance policies rarely include more than $500,000 in liability coverage, and lawsuits involving serious personal injury can greatly exceed that amount. In an ACE survey of more than 600 independent agents, 92 percent said that financially successful homeowners insured by mass-market carriers were likely underinsured against personal liability lawsuits.
A prudent approach is to purchase enough umbrella coverage to match a client’s net worth and future income. Such coverage can be surprisingly affordable—often just a few hundred dollars for the first million and less for each additional million. Moreover, higher deductibles on home and auto policies can offset the costs.
By reminding HNW clients of these simple steps, wealth advisors can help ensure that their clients and their clients’ guests enjoy a safe and happy 2014 holiday season.
David Spencer, senior vice president of Premier Client Services at ACE Private Risk Services, has more than 30 years of experience in the personal insurance business.
