Who doesn't love a good get-together with family, friends, and colleagues? Whether it's an intimate backyard BBQ or a large crowd for a celebration, it's essential to understand if you need insurance for a house party. Hosting a party at your home brings liability to the host. If you're considering hosting a party, reviewing the risks and ensuring you have the necessary insurance coverage is a good idea.
Why am I at risk if I host a gathering?
When you invite guests to your house, you also invite the risk of damage or injury to or on your property. If you serve alcohol to someone who later causes harm, like a drunk driving accident, you can also be held liable. If someone sues you for injury, you may be required to pay high legal fees and medical costs.
What does my home insurance cover?
Liability coverage is part of your homeowner, condo, or tenant insurance. It protects you if someone is injured on your property, and you're held legally responsible. It also covers damage to other properties caused by negligence, like a fire that starts on your property and spreads to your neighbour's property.
Suppose a guest falls down your front steps or is bitten by your dog, and they sue you to pay for their medical costs. In that case, your home insurance should cover the legal and medical fees up to the limit on your policy (typically in Ontario, that is $2,000,000, but it is adjustable and can vary depending on policies and insurers1). If you are a renter, you can only be held liable for an injury in your living space, where the rest of the building is the landlord's responsibility.
Should I purchase event liability insurance?
Event liability insurance provides additional coverage if you're hosting a one-time event, like a wedding or holiday party. The more guests you host, the higher the risk of something going wrong and the more liability coverage you may want to purchase.
Event liability insurance usually includes a much higher liability limit than a home insurance policy. It covers property damage, guest injuries, and rented equipment damage. If you plan on serving alcohol, you'll want to ensure that alcohol liability insurance is included in your event insurance policy. It will protect you from lawsuits for damage caused by a drunk guest on or off your property.
What is umbrella insurance, and why would I buy it?
Umbrella insurance provides more liability protection year-round than event liability insurance for a one-time event. It also covers liability expenses with a much higher coverage limit than your home and auto policies. The coverage amount you want to purchase is customizable depending on potential lawsuit costs. Additionally, umbrella insurance covers libel, slander, and false imprisonment claims not generally covered by other policies.
If you're unfamiliar with lawsuits, the cost of damages awarded in a court case could easily be more than the liability coverage on your home insurance. If someone sues you for injuring themselves on your property, and they're awarded more than $2,000,000 for medical costs, you're on the hook to pay the amount not covered by your home insurance.2 Umbrella insurance will give you extra protection for your assets if a lawsuit is brought against you that you don't have the means to pay. Of course, umbrella insurance has limitations – it doesn't protect your property or liability due to injury or damage caused on purpose.
If you're a current OTIP policyholder, contact us at 1-833-615-9326 to review your existing home insurance policy and discuss additional coverage options for hosting a party. If you're not insured with OTIP and shopping for home insurance, call us at 1-833-494-0089.
- Intact Insurance
- Investopedia