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Does HO Liability Insurance Extend to a Rented Wedding Reception Site?

Will homeowners liability insurance cover bodily injury, property damage and host liquor liability at a rented space for a wedding reception, or is special wedding liability insurance necessary?
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An agent’s insured is renting space in a commercial building for a wedding reception.

Q: Will homeowners liability insurance cover bodily injury, property damage and host liquor liability at the rented space, or should I recommend purchasing special wedding liability insurance?

Response 1: Depending on the specific policy and type of event, the HO policy likely provides liability coverage, subject to terms and conditions. 

When our daughter got married, I bought a standalone special events policy from WedSafe for around $250. It was an ISO commercial general liability policy with $1-million limits that included host liquor liability.

The wedding cost around $40,000. Spending $250 on this policy didn't even register on our radar. You can also purchase event cancellation and other similar coverages. I always recommend event insurance to people getting married.

Response 2: I recommend a special wedding liability policy that includes host liquor liability. ISO defines an “insured location" as “any part of a premises occasionally rented to an ‘insured’ for other than ‘business’ use." Host liquor liability coverage is probably included in the HO policy, unless there is an auto accident, in which case the motor vehicle liability exclusion might come into play.

Response 3: HO policies do provide liability coverage for renting venues for personal pursuits, like weddings. But coverage for liquor liability is problematic because the exclusion for motor vehicles can preclude coverage for an overserved guest who causes a car accident. I strongly recommend wedding insurance with primary liquor coverage—it’s available for a very reasonable price.

Response 4: These Big “I” Virtual University (VU) articles address this topic:

Response 5: Read the rental agreement to understand its exposures and insurance requirements. Then, compare the client's HO liability insurance and personal umbrella policy to the specialty wedding policy to identify the differences in coverage. Many HO policies and PUPs cover temporary rentals, including contractual liability coverage without exclusions for host liquor liability. Sometimes wedding policies are unnecessary and add more problems, with "other insurance" clauses coming into play, but they can also be a good thing. 

Response 6: The ISO HO-5 does not cover a rented event space. Buy the insurance from a specialty carrier.

Response 7: Under the current ISO HO form, liquor liability is not specifically excluded. However, the auto liability exclusion is so all-encompassing that it could be interpreted to include liquor-related situations. The best course of action is to secure liquor liability from the surplus lines market for the event. Alternatively, if an outside caterer is responsible for serving the liquor, ask them to include the insured as an additional insured under their policy.

This question was originally submitted by an agent through the VU’s Ask an Expert Service, with responses curated from multiple VU faculty members. Answers to other coverage questions are available on the VU website. If you need help accessing the website, request login information.

Tuesday, June 2, 2020
Personal Lines