Larry Wilson, played by Andrew McCarthy, and Richard Parker, portrayed by Jonathan Silverman, are low-ranking employees at an insurance firm in New York City. During their routine examination of actuarial reports, Richard stumbles upon discrepancies in payment records. When they present their findings to their CEO, Bernie Lomax (Terry Kiser), they are praised for uncovering insurance fraud and invited to spend a weekend at his luxurious beach house in the Hamptons. However, what they don’t realize is that Bernie is the mastermind behind the fraud.
In a desperate move, Bernie conspires with a group of mobsters to eliminate Larry and Richard, intending to stage their deaths as a murder-suicide. But things take a twisted turn when the gangsters decide that Bernie himself should be the one to go, believing he’s become a liability due to his reckless behavior.
Prior to Larry and Richard's arrival, Bernie calls the hitman Paulie (Don Calfa) to orchestrate his own murder while framing the two unwitting employees. Unbeknownst to him, their conversation is being recorded, and he plants cash along with a faux confession to implicate Larry and Richard further. When the two friends finally arrive, they’re horrified to find Bernie’s lifeless body. Before they can alert the authorities, the usual party guests flock in, oblivious to the grim reality, as they become engrossed in festivities while Bernie’s sunglasses hide the tragic truth.
Overwhelmed by the prospect of being implicated in the crime, Larry suggests to Richard that they pretend Bernie is still alive, a notion Richard initially dismisses as ludicrous. However, he is persuaded to comply when his office crush, Gwen Saunders (Catherine Mary Stewart), makes an appearance. The night takes a romantic turn as Richard and Gwen enjoy a stroll on the beach, but their moment is interrupted when Bernie’s body washes ashore, leading Richard to seek Larry’s assistance in retrieving the corpse without raising suspicion.
Meanwhile, Vito’s girlfriend Tina arrives, ready to confront Bernie over suspected infidelities, unknowingly brandishing a knife at Larry and Richard. In a chaotic turn of events, one of Vito's gang members misinterprets the situation, thinking Bernie is alive and informs Vito, who instructs Paulie to finish the job.
The next day brings more complications as Richard finds Larry humorously animating Bernie’s corpse. Amidst their bickering about the police, they inadvertently trigger a message revealing Bernie’s lethal plot against them, further escalating their fears of being the targets of a mob hit. Desperately, they decide to utilize Bernie’s corpse for their defense.
As they try to escape the island on various means, including a speedboat, mishaps plague their efforts, including being unable to board the ferry and running out of gas. In a state of bewilderment, Paulie spots them and becomes increasingly convinced of Bernie’s supposed resilience.
Upon returning to the beach house, Gwen interrogates the duo, eventually uncovering the shocking truth about Bernie. Just then, Paulie appears and, in a fit of rage, shoots at Bernie’s body. However, failing to harm Larry, Richard, and Gwen due to his empty gun, he pursues them frantically. In a stroke of luck, Larry manages to subdue Paulie, and Richard and Gwen call for help.
By the time the police arrive to arrest Paulie for murder, he remains adamant that Bernie is still alive. The film closes with a bizarre twist: as Bernie is loaded onto an ambulance, his gurney rolls away, leading him to tumble onto the beach, just in time for a young boy to start playing in the sand around him, leaving Larry, Richard, and Gwen to flee the scene.
