Liability Coverage on your Property
As we get closer to the summer months, we’ve gotten a few questions about hosting parties and the liability ramifications if someone were to get injured on your property. Many of you are probably planning your high school senior’s graduation party in your own home or a summer pool party, so I thought we could discuss some important details on this topic.
First, I’d like to talk about premises liability. With premises liability, you have two different coverages that apply to an injury that may happen on your property. The first one is medical pay. This coverage is triggered by an injury which occurs on your property. Here’s some typical Med Pay policy language:
“We will pay the necessary medical expenses that are incurred or medically ascertained within three years from the date of an accident causing bodily injury.”
The language goes on to discuss other triggers off premise, but those do not apply to our discussion. The second coverage is liability. This means that the carrier would pay an expense for which you would become legally liable. The incident could be anything, but legal liability triggers the coverage.
On a typical policy, medical pay coverage ranges from $1-5K and liability from $100-$500K. If you have an umbrella for $1 million, that would apply as well. The medical pay is intentionally set very low because it is only premises based.
To clarify all this information, here are a few specific scenario to help understand the difference in coverages:
Let’s say you have a summer bonfire at your house. The party has been going on for a while and some wind kicks up later in the evening. Unfortunately, a tree in your yard falls in the winds and injures one of your guests. There are two different scenarios here: if you did not know the condition of the tree and the wind hit it just right, this situation would be a medical pay claim. If you had been advised previously that the tree was rotten inside because of insect damage and chose to do nothing, we would have a med pay claim as well as a potential liability claim.
That is just an overview of the difference between medical pay and liability in a homeowners policy and how each might apply to you.
Another very important piece to note is if there is alcohol at a party. Wisconsin has a very powerful Tavern League and the host liquor liability laws are some of the most generous in the country.* Here are some generalizations in these laws: In Wisconsin, adults of legal drinking age are responsible for themselves and the homeowner would have no liability for a third-party injury. However, the largest risk would be someone who willfully provided alcohol to a minor, left the party, and created a third-party liability (typically a car accident).
With graduation parties approaching, keep a close watch on the situation. If you would like to know more, here’s a great overview on the topic from the State Bar of Wisconsin. Additionally, you can always give us a call and we can help you find answers to your questions.
We can’t wait until Summer! Congrats to those with graduating high school or college. As always, thanks for allowing us to protect you and your family.
Jon
*DISCLAIMER: I am not an attorney and these are just generalizations that apply to hosted parties.
