Don't Serve a "Liability Cocktail" at Your Next Association Social Activity
Pool parties, cookouts, and holiday gatherings are all a part of the summer landscape for most community associations. These events often bring the membership together and serve a beneficial purpose: to foster and reinforce the power of community. However, if alcohol is served at any of these community functions, it can be a recipe for liability if proper precautions aren't taken first.
One guess who's getting sued if a member, guest or Association employee drinks too much and gets into an accident. Time's up.
The simplest way to avoid liability for alcohol-related accidents is to avoid serving alcohol at any social events the Association sponsors. But, if you do decide to serve alcohol, at the Community's annual poker night for instance, you can minimize the Association's possible exposure to liability.
(1) Keep covered! Make sure that the Association's general liability insurance policy has a clause granting a "limited liquor liability" or "host liquor liability" coverage. This type of coverage protects the Association if folks are involved in accidents after consuming liquor served by the Association. Better yet, if the Association knows when an alcohol-related event will occur, it can plan for such by insuring the singular event, versus paying a much larger premium for annual coverage.
(2) The Association is not a BAR, so don't charge like one. If the Association charges for the alcohol it serves, or charges a cover/entrance fee for the event, then it can multiply liability and defeat the "limited liquor liability" coverage cited above. The Association may be liable for (i) causation or contribution to the intoxication of any person, (ii) furnishing alcohol to minors, (iii) furnishing alcohol to an intoxicated person, or (iv) violation of state and local ordinances regarding the serving of alcohol. The "limited liquor liability" coverage wasn't designed to protect entities that are in the business of "selling, serving, or providing" alcohol. By abstaining from charging either per drink or per entrance fee, the Association can assert that it was not in the "business" of "selling, serving, or providing" alcohol to its members and their guests.
(3) Let the Pros take care of the bartending. Subcontracting the delivery and serving of alcohol at Association events can be an attractive alternative to any of the scenarios listed above. The vendor is more likely better-trained to spot minors and people that have consumed too much. Plus, the vendor's liquor liability insurance will protect itself and possibly the Association too, if you insist that the vendor list the Association as an "additional insured" on the policy.
*thanks to the Vendome Group, LLC, for excerpts from the Insider's Guide to Managing Community Associations
One guess who's getting sued if a member, guest or Association employee drinks too much and gets into an accident. Time's up.
The simplest way to avoid liability for alcohol-related accidents is to avoid serving alcohol at any social events the Association sponsors. But, if you do decide to serve alcohol, at the Community's annual poker night for instance, you can minimize the Association's possible exposure to liability.
(1) Keep covered! Make sure that the Association's general liability insurance policy has a clause granting a "limited liquor liability" or "host liquor liability" coverage. This type of coverage protects the Association if folks are involved in accidents after consuming liquor served by the Association. Better yet, if the Association knows when an alcohol-related event will occur, it can plan for such by insuring the singular event, versus paying a much larger premium for annual coverage.
(2) The Association is not a BAR, so don't charge like one. If the Association charges for the alcohol it serves, or charges a cover/entrance fee for the event, then it can multiply liability and defeat the "limited liquor liability" coverage cited above. The Association may be liable for (i) causation or contribution to the intoxication of any person, (ii) furnishing alcohol to minors, (iii) furnishing alcohol to an intoxicated person, or (iv) violation of state and local ordinances regarding the serving of alcohol. The "limited liquor liability" coverage wasn't designed to protect entities that are in the business of "selling, serving, or providing" alcohol. By abstaining from charging either per drink or per entrance fee, the Association can assert that it was not in the "business" of "selling, serving, or providing" alcohol to its members and their guests.
(3) Let the Pros take care of the bartending. Subcontracting the delivery and serving of alcohol at Association events can be an attractive alternative to any of the scenarios listed above. The vendor is more likely better-trained to spot minors and people that have consumed too much. Plus, the vendor's liquor liability insurance will protect itself and possibly the Association too, if you insist that the vendor list the Association as an "additional insured" on the policy.
*thanks to the Vendome Group, LLC, for excerpts from the Insider's Guide to Managing Community Associations
posted by William G. Gammon at 12:54 PM
William G. Gammon
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