Limiting Your Liability During the Company Holiday Party

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With the fallout from the #MeToo movement forcing employers to change their internal conduct policies, they are also reassessing the office holiday party. While gatherings can be a good time for your staff to mingle casually with their colleagues and clients, they can also prove to be a liability for businesses – particularly if you serve alcohol. Not all companies are canceling holiday parties, though. Some are being a little more careful and limiting or eliminating alcohol served at holiday celebrations. If you are throwing a holiday party, you should take steps to limit risks and make sure you are protected with proper insurance coverage. Your biggest concern should be intoxicated workers leaving the party and driving. Almost all states have liquor liability laws that allow an injured third party to sue not only the person who injured them or damaged their property, but also the individual or organization that overserved them alcohol. While these laws were originally written to cover bars and other establishments that serve alcohol, they have been extended to cover “social hosts,” which include:
    • Employers that hold events where they serve alcohol.
    • Individuals or groups that hold events (including weddings and summer barbeques).

Limiting your liability

Experts recommend that you take steps to limit your liability:
  • Lay down the ground rules – You should hold a meeting and create documentation for your employees to sign that spells out their duty to act responsibly and treat all other staff with respect. This should also include advising them to drink in moderation and not drink and drive.
  • Lead by example – Management should model the behavior they expect from everyone at the party: polite conversation and drink in moderation, if at all.
  • Hold the party offsite – This is a smart move because if there are issues that occur, it’s best they don’t happen at your place of business.
  • Consider not serving alcohol – This is the safest bet to ensure you are not vicariously liable for any intoxicated employees.
  • Use different approaches if you serve alcohol – If you do plan to serve alcohol, consider requiring your staff to pay for drinks. This also has the effect of people drinking less if it’s on their dime. Another option is to issue drink vouchers to limit the amount of drinks each person can have.
  • Hire a professional bartender  – Most bartenders are trained to detect signs of intoxication and are better able to cut someone off in a professional and polite manner.
  • Offer alternative beverages  – You should also offer non-alcoholic beverages, and always serve food so people don’t drink on empty stomachs.
  • Stop serving towards the end of the party  – Stop serving alcohol at least one hour before the end of the party, and instead bring out the coffee, tea and soda.
  • Arrange transportation  – If you are serving alcohol, you should make special transportation arrangements before the party. Encourage your employees to take advantage of the transportation for their and the public’s safety if they have had drinks.

Insurance considerations

If you have liability concerns, you should call us to discuss your current commercial general liability coverage to make sure that it doesn’t have any exclusions or conditions for these kinds of risks. If you have gaps, you may want to consider special event coverage that would cover liquor liability and other liability exposures specific to the event. We can help you check your policy to see if liquor liability is covered by your CGL policy. If there is any harassment at the party that could put you in the crosshairs for a harassment lawsuit, you could also be sued. This kind of action would not be covered by your CGL policy, but it would be covered under an employment practices liability insurance policy. An EPLI policy will extend coverage to your business for any discrimination, sexual harassment, emotional distress, and other workplace-related charges. The policy should include third party coverage, which covers claims made by non-employees, usually clients or customers, who allege that an employee engaged in wrongful conduct such as sexual harassment or discrimination.


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