The Last Word
Outdoor holiday light displays are igniting a host of liabilities for insurers, including fires, injuries and distracted-driver accidents.
- Lori Chordas
- December 2018
Homes and organizations across the world will soon be lighting up the holidays with elaborate outdoor light displays that can potentially attract hundreds or even thousands of onlookers. But inside those ornate exhibits lurk potential dangers.
In 2014, a Los Angeles man suspected of driving under the influence injured 13 people after he drove into two parked vehicles that hit a group of holiday light display onlookers standing on a residential sidewalk.
Distracted driving isn't the only potential risk. Slips and falls by visitors who venture onto the property of homeowners or businesses and injuries sustained by individuals assembling those exhibits are among the most common claims generated by outdoor light displays, said Stephanie Waldron, senior vice president of events and attractions at K&K Insurance.
Last year, an 82-year-old man from Burlington, Ontario, died after falling off a ladder while examining a roof leak at his home's Christmas light display.
Light display-related losses are typically covered under business, auto or homeowners policies, said P.J. Miller, chairman and a partner at independent insurance agency Wallace &Turner. A standard homeowners policy, for instance, typically provides about $1,000 of medical payments coverage for injuries, regardless if the homeowner was negligent or not.
Those policies also cover property losses, such as fires. Overloaded electrical outlets, faulty bulbs and poorly placed lights can send light displays up in smoke.
Coverage begins to blur when homeowners and display organizers charge a fee for spectators to view their illuminated spectaculars. “Then it becomes a question of whether it's a residential display or a commercial display and where does personal insurance stop and commercial insurance begin,” said Jason Metzger, senior vice president of risk management at PURE Insurance.
Many of PURE's policyholders hire outside contractors to decorate or hang lights. “Those third-parties can potentially be injured, and that's where coverages like personal excess liability will help,” he said. PURE insures only high net worth individuals and families.
Inland marine, crime, liquor liability, workers' compensation and event cancellation can also cover losses generated by public outdoor light displays.
“We're also occasionally asked to write short-term non-owned commercial auto liability and hired auto liability if staff members need to drive to pick up something or vehicles are rented. Also, something more unique is volunteer accident coverage that pays for losses to volunteer workers who may get injured while climbing ladders or hanging lights,” K&K's Waldron said.
Some insurers have created coverages specifically designed for public outdoor light displays. U.K. specialized intermediary Event Insurance Services offers a Christmas lights public liability policy that covers legal liability to pay claimants costs, including accidental bodily injury, accidental loss of or damage to property which does not belong to the policyholder and accidental obstruction, trespass, nuisance or interference with any right of way, air, light or water.
So far, the industry has received only a handful of claims from public outdoor light displays gone awry.
Light display organizers now face some new concerns, including elaborate computer systems, drones and laser lights. “Misdirected laser lights could temporarily blind visitors as they drive through a display, or homeowners may fly drones above their homes or neighborhoods. That creates new risks and additional investigation requirements for agents and brokers, who now are tasked with assessing if drone operators are certified and follow FAA guidelines, determining how high a drone is flying and ensuring computer networks aren't at risk for potential cyber hacks,” Wallace &Turner's Miller said. That's where having risk mitigation procedures and a full risk assessment to minimize potential hazards can help, he said.