Depends on the game & the person. If it's a cheaper, common title (let's say 10 bucks or less to replace), I'll lend that out pretty freely. It's a good way to see if the lend-ee is good enough to trust with something more expensive. Rarer titles are lent out to those I trust (most of my fiancé's siblings are quite trustworthy with such.)
My rarest of rare games (think hundred+ dollars) don't get lent out. Period. Quite simply, if something happened I would expect the game to be replaced quickly. I don't want these people to suddenly find themselves with a massive payment to cover a game damaged accidentally/outside of their control.
Of course, if you're at my place, you're welcome to play anything you want*. I'll be around, so it'll be easier to keep an eye out of bad situations.
(*I have a handful of rare sealed games. Those are off limits. If anyone's opening a game, it's ME!)