Eat, drink, but be wary during the fall and winter seasons of celebrations.

Holiday house parties can be hazardous to your financial health and your guests' safety.

If you are likely to host a holiday party this year, you probably don't know how risky it can be or if your homeowners insurance policy covers that risk.

Alexandria, VA-based Independent Insurance Agents and Brokers of America found in a survey last year of 1,000 party hosts, more than two thirds of them mistakenly believed they were not liable for alcohol related crimes. The survey also found that most of those who believed they were not liable were in households with incomes of more than $75,000 a year -- households most likely to host a holiday party.

Party hosts indeed can be liable under local "social host" laws if someone drinks too much and is involved in an auto accident on the way home -- at which time the party is really over.

Nearly three dozen states have laws that hold social alcohol servers liable as a third party to drunken driving crimes and the laws apply. These laws apply to residential party hosts who both own and rent their homes. Holiday parties can range from small family gatherings to larger shindigs and business parties in the boss's home.

The survey also found that 86.8 percent of those surveyed answered "no" or "don't know" when asked whether or not they reviewed their insurance coverage or checked with their agent to ensure they have adequate liability coverage in the event they are sued and found liable for the actions of a guest who drank alcohol at their party. Again, those with household incomes of more than $75,000 overwhelmingly (96 percent) answered "no."

Before you send out holiday party invitations, review both your local social host ordinances and your home insurance policy. Be sure you have sufficient liability coverage in the event you are sued and found liable for the actions of an inebriated guest who had too much wassail with his or her sugar plums.

Here's how experts say you can get the party started without decking the halls with boughs of folly.

• Before you send out the invitations, check your homeowners, renters or condo-owners insurance policy and discuss it with your insurance agent. Make sure it specifically provides sufficient personal-liability coverage for events from the negligence of the policy holder.

• If you party hearty frequently, consider obtaining an umbrella liability policy to supplement your regular coverage at an additional premium cost of several hundred dollars more per year. Make sure there isn't a gap between the existing policy and coverage provided by the homeowner's policy. For example, if your homeowners insurance limits coverage to $300,000 and your umbrella policy covers costs above $400,000 you would have too make up a $100,000 difference if you file a claim.

• Consider making guests hand over their car keys when they arrive as their ticket fun. They are much more likely to be reasonable about handing over keys before they start partying than they will be after a few good stiff ones.

• Don't serve alcohol to anyone under the legal age or your insurance policy may not protect you in a suit.

• Don't let guests mix their own drinks. Consider hiring a professional host, caterer or bartender who is better skilled at knowing when to turn off the tap for someone who's had enough to drink. The person you hire should also be insured and you should inquire if your party can be added to me insurance for an extra layer of protection.

• Encourage group activities that focus on fun instead of booze -- spin the bottle instead of hitting the bottle.

• Prepare plenty of foods to prevent guests from drinking on empty stomachs but avoid salty or spicy foods which tend to make people thirsty. This is a good time to through out the low-carb diet that's made you pretty cranky anyway.

• Offer a large variety of no-buzz beverages -- juice, soft drinks, sparkling water, tea, etc. smoothies can be served up with festive edible decorations.

• Cap the tap and stop serving alcohol at least one hour before the party ends. Only time sobers an individual. Serving caffeine-laden drinks like coffee, tea, and colas does not speed sobering, but that activity could give you some wide-awake drunks who think they are sober.

• If someone obviously has had too much to drink, drive them home, arrange for alternate transportation, or otherwise do whatever is necessary to keep them from getting behind the wheel. They may hate you through the cloud of a drunken stupor tonight, but when they sober they will thank you for giving them nothing more than a pounding hang over.

• If an incident does occur, notify your insurer right away so that you are in compliance with any "timely notice" clause.

Published: November 12, 2004

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A journalist for 35-years, Broderick Perkins parlayed an old-school daily newspaper career into a digital news service offering editorial content and consulting services. Perkins' San Jose, CA-based DeadlineNews Group includes the flagship news site, DeadlineNews.Com, offering real estate, personal finance and consumer journalism, and a backshop, the Deadline Newsroom.