Thinking of throwing a holiday party, or perhaps a New Year’s Eve bash? ‘Tis the season to be jolly. And that includes holiday parties, many of which involve alcoholic beverages. Most people are generally aware that the local tavern or bar can be held liable if a patron is over served and then causes an accident resulting in injury or death. Many, however, are blissfully ignorant of the fact that the “dram shop” liability claim that can financially cripple a commercial establishment can do the same or more to a homeowner, under certain circumstances.
Indiana law imposes civil liability on persons who violate the Dram Shop Act for damages arising from the intoxicated person’s subsequent tortious conduct where: “(1) the person furnishing the alcoholic beverage had actual knowledge that the person to whom the alcoholic beverage was furnished was visibly intoxicated at the time the alcoholic beverage was furnished; and (2) the intoxication of the person to whom the alcoholic beverage was furnished was a proximate cause of the death, injury, or damage alleged. It’s important to note that the law makes no distinction between the local tavern, which sells alcoholic beverages in the ordinary course of its business, and a “social host,” i.e., the co-worker who invites you over to his house for a drink during the holiday season. Since at least 1985 it has been clear in Indiana that the Dram Shop Act presents a risk not only to commercial purveyors of alcoholic beverages, but to anyone who furnishes, just “one more drink” to an obviously intoxicated person. As the Indiana Court of Appeals said, borrowing language from a California court decision:
Doubtless, the spectre of civil liability may temper the spirit of conviviality at some social occasions, especially when reasonably observant hosts decline to serve further alcoholic beverages to those guests who are obviously intoxicated and perhaps becoming hostile. Nonetheless, in this context, we must surely balance any resulting moderation of hospitality with the serious hazard to the lives, limbs, and property of the public at large, and the great potential for human suffering which attends the presence on the highways of intoxicated drivers. In doing so we need not ignore the appalling, perhaps incalculable, cost of torn and broken lives incident to alcohol abuse, in the area of automobile accidents alone…
Most homeowner’s insurance policies provide liability coverage for host liquor liability at your home or another location, as long as you’re not charging for alcohol. But you should check with your insurance agent, both to make sure you have liability coverage under the circumstances, and to make sure that your liability limits are adequate. Liability limits that protect you against a guest to your home tripping on the front step and breaking an ankle may not be adequate to protect you against the potential liability when a drunken partygoer is involved in a serious automobile accident on the way home.
And if you or a loved one is seriously injured as a result of the intoxication of someone who was over served at a holiday party, you need not despair just because the intoxicated person happened to get drunk at a private residence, as opposed to a tavern or restaurant. It is still possible to obtain just compensation by claiming against the host’s homeowner’s insurance policy.
To protect yourself against possible claims, follow these simple rules when hosting a gathering that involves alcoholic beverages:
- If possible, make your party “BYOB.” When guests supply their own alcoholic beverages, it significantly decreases the risk of liability on the part of the host.
- Don’t fix or serve drinks to the guests. Allow the guests to serve themselves.
- Include soft drinks, water, coffee, etc., at the party, allowing guests to choose non-alcoholic alternatives.
- Encourage the use of designated drivers, and have the phone number of the local cab company handy to give to partygoers who may appear a bit tipsy on leaving.
- If your gathering is a very large one, consider the use of a professional bartender service. Professionals are trained to spot the signs of intoxication, and an ounce of prevention is worth a pound of cure. Check to make sure the bartender is adequately insured, and that the insurance will protect you in the event of a claim.