Community events are an important time of gathering neighbors together and enhancing holiday spirit! For board members, it is important to stay informed of the laws and regulations surrounding event hosting for their community.
A hot topic of discussion for many boards is whether or not alcohol distribution is a good idea at an HOA hosted event. To keep communities and their members safe, we advise to never allow alcohol at community events, as the risks far outweigh the benefit.
However, we encourage you to take a deeper dive into what our insurance experts have to say, in order to better understand what serving alcohol would entail at your next event.
Insurance
The first thing to consider when serving alcohol at an HOA event is the potential liability. Lawsuits are generally what is thought of first when considering liabilities. If someone dies or is injured as a result of drinking alcohol at the HOA hosted event, the association could be held accountable.
Making sure your HOA is covered for any accidents is the first step in event planning. Talk to your association’s attorney or insurance provider for any advice they might have on this topic. You will also need to determine the type of license the HOA will need (depending on whether you’re charging for the event/alcohol or serving the alcohol for free).
Verify that the party has insurance, and that the association is named as an additional insured for the event. This can be done by asking the association’s insurance agent whether the quantity of coverage is appropriate or whether the association needs to obtain more insurance for the event.
To Charge or Not to Charge?
The laws surrounding serving alcohol at events can vary by state, but generally, the association will need to apply for a permit or license to serve and charge for alcohol, this includes cover charges and tips for waitstaff.
If the association chooses to serve alcohol but not charge for it, the general opinion among experts is that the board should confirm that the Commercial Package includes Host Liquor Liability coverage. Also find out what is permitted by your HOA’s governing documents, and if there are any restrictions already in place.
BYOB
If, after checking your state laws and governing documents, your board would still like to move forward with alcohol at the HOA event, “BYOB” or “Bring Your Own Beverage”, can be a great alternative to serving it.
The association would not have to worry about as many variables, while still allowing their members to bring their own drinks and enjoy the event. To do this, boards should set limits on what drinks are allowed, for example, beer, wine, and seltzers could be permitted, while hard liquors should be kept at home.
What About Private Parties?
When a homeowner/member chooses to host a private party on HOA ground, the association should always verify whether or not alcohol will be at the event.
If the governing documents of the HOA allow for alcohol, and the host plans to serve it, then in addition to Commercial General Liability coverage, Special Event insurance and Liquor Liability coverage should be required, and the HOA should be listed as an additional insured on the policy.
General Precautions for Serving Alcohol at HOA-Sponsored Events
Whenever alcohol is being served at an event, the board should take measured steps to safeguard their members to reduce potential liability:
- Set a drink limit. (We recommend a two-drink limit)
- Avoid hard liquor.
- Verify that the premises are safe.
- Attendees should be of legal age; either no minors allowed, or have in place a thorough identification/vetting process that prohibits minors from imbibing.
- Refrain from serving a visibly intoxicated person (doing so could result in a charge against you).
- Stop serving alcoholic beverages in advance of the event’s ending time.
Whatever kind of gathering the HOA plans to throw for its members, it is advisable to think through all the alternatives and potential pitfalls and to consult with the association’s legal counsel and/or insurance broker. While JellyBird does not advise holding a gathering with alcohol because of the risks, we still want to keep you and your family safe by keeping you informed on all HOA matters, including event planning.
