Super Bowl parties: are you covered?

If you host a Super Bowl party at your home, are you covered for liability claims? What if one of your guests has too much to drink and has an accident on the way home?

Your homeowners (or renters) policy does provide liability coverage for slips and falls and similar claims from injuries on the premises. But what about the bigger problem of liquor liability? Surprisingly, it isn’t even mentioned in most homeowners policies, not even in the exclusions.  Some assume that this means there is coverage, but there are other exclusions that might apply depending on the circumstances:

  • Vehicle exclusions – all homeowners policies have vehicle exclusions, but the wording varies. Some policies exclude all claims resulting from the use of a motor vehicle, while others only exclude motor vehicles owned or operated by an insured.  So some policies will probably protect you for your guest’s car accident, but other policies probably won’t.
  • Intentional acts exclusions – If someone claims that you intentionally tried to get them drunk, coverage probably won’t apply.
  • Illegal acts exclusions – Some policies exclude illegal acts, so coverage would probably be precluded if you served alcohol to minors.
  • Business exclusion – If you take money from your guests for the party, some companies might try to claim you were operating a business. It’s better not to have money change hands (though your guests can certainly bring food or drinks to share!)

Even the courts struggle with this issue. A summary of a case from Massachusetts can be found at the end of this article if you want to see some of the legalese. Give us a call if you would like us to have a look at your homeowners policy.

Albion Agencies, Inc. is a licensed insurance agent/broker only in the State of New York.

The information in this post is general in nature, and geared toward insurance conditions in Western New York. As always, you should speak with an insurance adviser to determine your specific insurance needs.

Case of the Month
Party Host Not Covered for Drunken Guest’s Auto Accident

A Massachusetts appellate court ruled that a home owner has no coverage under a homeowners policy for negligently serving alcohol to an underage guest who subsequently drove drunk and caused a car accident resulting in a serious injury. The court ruled that the policy exclusion for bodily injury arising out of the use of a motor vehicle by any person excluded coverage for this incident. The case is Massachusetts Prop. Ins. Underwriting Ass’n v. Berry, 80 Mass. App. Ct. 598, 954 N.E.2d 584 (2011).

The Massachusetts Property Insurance Underwriting Association (MPIUA) issued the homeowners policy. It was alleged that the home owners negligently served, supplied, or permitted a nonresident minor to consume alcohol, who then became intoxicated on their insured premises. While intoxicated, the minor drove a vehicle he owned and struck another vehicle operated by Berry, who suffered serious injuries. Berry sued the home owners on a theory that they were negligent social hosts. The insurer denied coverage, relying upon the motor vehicle exclusion.

In reaching its decision, the court first considered the case of Worcester Mut. Ins. Co. v. Marnell, 398 Mass. 240, 496 N.E.2d 158 (1986). In this case, the Massachusetts Supreme Court ruled that a separation of insureds clause required a similar exclusion in a homeowners policy to apply separately to each insured, ultimately resulting in coverage for the home owners for a similar host liability claim. In this case, the term “insured” as used in the motor vehicle exclusion referred only to the person claiming coverage under the policy. Since the named insured did not own or operate the vehicle that struck the deceased, the motor vehicle exclusion did not apply.

In Berry, however, the insurer had modified the policy exclusion in response to Marnell, such that the exclusion effectively was triggered for any bodily injury claim arising out of use of a motor vehicle by any person. The language, according to the court, established a type of “personal injury” that the policy categorically excluded: that arising out of the use of a motor vehicle. The court, as a result, ruled in favor of the insurer in denying coverage. The exclusionary language in the MPIUA policy thus creates a coverage gap for home owners for this category of potential liability. Coverage gaps such as this should be pointed out to clients who entertain guests in their home and resolved via a broadening endorsement.

Patrick B. Omilian of Goldberg Segalla LLP, Buffalo, New York, wrote the case of the month summary.

This article appeared in the Personal Lines Pilot newsletter, from irmi.com

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