At the year's end, everyone looks forward to the office holiday party. It’s a time to celebrate the year's successes, socialize with the whole team, boost employee morale and end the year on a good note. But for employers, holiday parties can also be a liability. In fact, under the United States Department of Labor, employers are subject to all insurance claims and laws even “off the clock,” like during a holiday company party. For employers, it is important to take precautions this season to minimize risk and to ensure your business—and its employees—are properly protected and insured.
Liability Concerns for Holiday Company Parties
General Liability Concerns for Companies
If you're a business owner, chances are you have a general liability policy in place for your company. This helps protect your business and its employees from the financial consequences of a lawsuit related to injuries or property damage, though not employee injuries. That would be covered under your workers comp policy. This form of commercial insurance can provide valuable protection during a company party and often times it will provide some coverage for alcohol-related claims.
Make sure your business is fully protected with the appropriate amount of “holiday party insurance.” Your commercial general liability policy will often cover liquor liability in these cases. However, you should check with an insurance broker to ensure your policy covers social events and “off-the-clock” hours as well. This helps pay for any potential damages if your business is sued and found at-fault, like in the case that a business over-served one of their employees who then drove home and caused an accident.
44 states have liquor liability laws. This puts liability and responsibility on any bartender or establishment that serves alcohol to someone who is intoxicated or underage. In most states, these laws also include “social hosts,” like an office party or even an intimate Christmas party with friends. Basically, this places some liability on the host or server. In some states, criminal charges may apply too. For example, one of your employees drives home drunk from the office party. They collide with another car, and the other driver is injured. That driver can sue your company—the one who served the alcohol—for damages.
Employment Practices Liability
You may also want to consider Employment Practices Liability Insurance. This will protect your business from costs associated with cases of discrimination, sexual harassment, emotional distress, and other workplace-related issues. This can be important for a holiday company party, as the social and informal atmosphere could lead to less than professional behavior from your employees, particuarly if there is alcohol being served. It’s possible that someone can drink too much and say something inappropriate or engage in wrongful conduct. If so, the victim could also sue your company for certain damages related to that employee’s behaviors at the company party.
If you’re hosting the company party at your house, you will want to ensure you are fully covered by your homeowners’ insurance. This means you will need personal liability coverage, which will help protect against any costs if you are sued for damages in your home. This would cover any liquor liability as well as slips, trips, burns, or other injuries on your property. You may also want to consider purchasing an umbrella plan to create an additional line of liability coverage. You should also update your home inventory and contents coverage to ensure all of your valuables are fully covered in case of damage or theft during the party.
Preventing Holiday Company Party Liability Claims
If your business is throwing a holidy party, you should take precautions to minimize your risk. These tips will help you ensure that no one over-drinks, drinks and drives, or acts inappropriately. Taking a few key steps will protect against costly insurance claims.
- On the holiday party invitation, remind employees to be responsible and drink in moderation.
- Ensure that management leads by example and does not over-drink.
- Hire a professional bartender who is trained at spotting intoxication. He or she can politely cut off an intoxicated individual without embarrassment.
- Ensure that bartenders are aware of any underage attendees, like interns or part time workers.
- Don’t have an open bar. Guests will drink less if they have to pay for drinks themselves.
- If you want to provide the alcohol, create a voucher system with a maximum number of free drinks.
- Stop serving alcohol later in the evening. Switch to tea, coffee, and soft drinks.
- Always offer food and non-alcoholic beverages.
- Offer cab services to employees free of charge to avoid drinking and driving.
- If you see that someone is intoxicated, put him or her in a cab yourself.
- Host the party off-site. This helps share the liability with the restaurant or hotel—although you are still on the hook in many cases.
- Create a safe environment. Visit the party area ahead of time to remove any dangerous concerns, like icy walkways or exposed cords.
The Bottom Line
The holidays are a time to celebrate and the holiday company party is no exception. By evaluating your risk and taking steps to put the right insurance coverage in place, your company holiday party can be a fun and stress-free affair for everyone.
Hosting a company party? Give us a call to review your commercial insurance policies or get a quote at (844) 824-2889.
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