Many people enjoy getting together with friends, family and colleagues for a backyard BBQ or holiday party. As options for public venues are limited due to COVID-19 restrictions, more Canadians may be turning to hosting smaller gatherings at their home that comply with their local COVID-19 guidelines for social distancing and gathering size. However, throwing a party at home brings liability risk to the host. If you are hosting a small gathering, it’s a good idea to review the risks involved and ensure you have the insurance coverage you need.
Why am I at risk if I host a gathering?
When you invite guests to your home, you also invite the risk that someone could damage your home or hurt themselves on your property. If you serve alcohol to someone who later causes harm, such as by causing a drunk driving accident, you can be held liable as well. If someone sues you for harm, you may be forced to pay high legal fees and medical costs that you can’t afford.
What does my home insurance cover?
Part of your homeowner, condo or tenant insurance is liability coverage, which protects you if someone is injured on your property and you’re held legally responsible. It also covers damage to other people’s property caused by your negligence, such as a fire that starts in your townhouse and spreads to another.
For example, if a person slips on your icy steps or gets bitten by your dog and they sue you to cover their medical costs, your home insurance will normally cover the legal and medical fees up to the limit on your policy, which is typically $2,000,000 in Ontario, though this amount is adjustable and can vary between policies and insurers.1 If you are a renter, you can only be held liable for injury that happens in your living space, as the rest of the building is the landlord’s responsibility.
Should I purchase event liability insurance?
Event liability insurance provides additional liability coverage if you are hosting a one-time event, such as a wedding or holiday party. The more people you host, the higher the risk of something going wrong that could cost you dearly, and the more liability coverage you may wish to purchase.
Event liability insurance typically includes a much higher liability limit than the one on a typical home insurance policy and covers damage to your home and yard, injuries to guests, and damage to rented equipment. If you’re serving alcohol, you’ll want to make sure that party alcohol liability insurance is included in your event insurance policy to protect against 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 gives you more liability protection year-round, compared to event liability insurance which provides coverage for a one-time event; it also covers liability expenses above both your home and auto insurance policies with a much higher coverage limit. You can customize the coverage amount that you want to purchase to cover potential costs resulting from a lawsuit. Additionally, umbrella insurance covers libel, slander and false imprisonment claims that are not usually covered by other policies.
If you are not familiar with lawsuits, it may surprise you to know that the cost of damages awarded in a court case could easily cost you more than the liability coverage on your property insurance. If someone sues you for slipping on your property and getting a concussion and they are awarded more than $2,000,000 for medical costs and injury, you’re on the hook to pay the amount that’s not covered by your home insurance.2 Having umbrella insurance gives you extra protection for your assets in case a lawsuit is brought against you that you can’t afford to pay.
Umbrella insurance does have limits — it does not cover damage or injury caused on purpose, incurred in business or professional activities or damage to your own property.
Speak to an OTIP Insurance broker today! To learn more about your current home insurance liability coverage call 1-800-267-6847. If you want to get a quote call 1-866-561-5559.