Company holiday parties can be a good way to reward your employees, strengthen relationships with your team, and have a little fun with co-workers. Unfortunately, they can also cause liability concerns.
A vast majority of company parties are going to involve alcohol, some to a greater extent. The presence of alcohol can open a slew of issues regarding liability. In most states, liquor liability laws will allow a plaintiff to hold the person that provided the alcohol responsible for damages. The person filing the lawsuit could be someone at your party or someone injured by someone that was at your party. Like the victim of a drunk driving crash caused by an attendee of your party. We have a few tips to protect yourself and your company from a potential problem.
First and Foremost, talk to your insurance advisor about your party plans. They can advise if your current general liability policy will cover the exposure or if you will need a short-term event policy to cover it. If you don’t already have Employment Practices Liability Insurance (EPLI) on your business policy, you should. An EPLI policy can cover you in the event of an employment related claim, like an employee claiming sexual harassment or wrongful termination. This is an important coverage in general, but alcohol fueled work events can unfortunately exacerbate the risk.
Hold your work party away from your place of business, preferably at a bar or venue that is set up to serve alcohol. If you have your party at a convention center or similar place always hire a company to provide the bar service. Make sure that company has adequate liquor liability insurance and a trained bar staff. DO NOT buy a bunch of beer and liquor and invite everyone into the office conference room to have a party.
On the party invite, set expectations. Remind your employees to be respectful of others at the party and not to drink in excess. It’s also a good idea to stipulate a dress code. Set the tone for the party well in advance.
If you can, don’t offer to purchase drinks for everyone. If you feel you need to buy drinks, consider purchasing just beer and wine and offering a cash bar for liquor. Or use a ticket system. Give each attendee 2-4 tickets that they can redeem for drinks. After the tickets are used up, they will have to buy their own drinks. When people buy their own drinks, they usually drink less. Also, limit the time period that you will buy drinks (but not too short as to encourage shots!) and offer non-alcoholic drinks as well as food to limit the possibility of people getting too intoxicated.
If you have employees or attendees under the age of 21 use a fail-proof system of identifying them to prevent them from being served alcohol.
Arrange for transportation at the end of the night. Our company offers a free hotel room to anyone that lives more than 30 miles away from the event venue. We offer free Uber, Lyft, or cab rides to everyone else. Taking the extra step to get people home safely goes along way. It shows your employees that you want them to enjoy themselves and be safe and provides a community benefit by keeping intoxicated drivers off the road. Plus, no one wants their road-warrior sales person to lose their license due to an OWI!
By no means should you avoid having a company party. It is very easy to do it safely and protect yourself from liability concerns if you just follow some simple guidelines.