If you believe Hollywood, company holiday parties have the potential to go off the rails – think the debauchery of “Office Christmas Party”, or worse, having "a Hans Gruber" crash your get-together gala ala “Die Hard”.
While the reality is that the tone of your holiday hoedown is likely to be much closer to “Ho, Ho ... Ho-Hum” than, say, the behavior of “Bad Santa”, you still need to consider the possibility that a few hours of merriment can lead to months and months of legal and HR headaches.
“When the weather outside is frightful, company holiday party season can be so delightful. The soirees are a great opportunity for colleagues to celebrate everyone’s hard work and get to know one another better. But the mixture of excitement, alcohol, and the resulting lowered inhibitions can result in a legal headache for employers, who can be held vicariously liable for the actions of its staff,” warns JD Supra.
While playing “The Grinch” is never on a business owner’s wish list, they also need to consider their holiday party plans in terms of business liability, making sure they are properly covered.
“It’s the holiday season—time for family gatherings and office parties. But these events can also prove to be a liability for those who serve alcohol. That is why party hosts should protect themselves by making sure they have the proper insurance coverage and taking reasonable precautions to prevent any risks,” recommends the Insurance Information Institute.
While many companies put their holiday parties on the shelf the last two Decembers because of the pandemic, there is a return this season to more get-togethers as employers look for ways to celebrate with their staff and boost workplace morale.
“The holiday season is here, and many employers will host their annual year-end celebrations in the weeks to come. These events are generally meant to reward employees and foster camaraderie—but employers could be on the hook for holiday-party mishaps,” writes Lisa Nagele-Piazza for the Society for Human Resource Management.
Nagele-Piazza says there are four questions employers should ask when considering their holiday party and business liability:
Asking these questions and thinking through all aspects of your holiday party is crucial.
“In order to have a successful gathering, it is important that such employers carefully plan the gathering in a manner that ensures it is fun, inclusive, safe, and avoids common legal risks,” says the National Law Review.
There are several different types of liability concerns for your company holiday party including:
There is a reason that the first question asked about before holding a holiday party was whether to serve or not to serve alcohol.
“Unsurprisingly, most complaints arising from company parties involve alcohol. After a few drinks, inhibitions are lowered, which may result in employees engaging in conduct or comments that are unacceptable for the workplace,” says CSG Law. “Remember, even if your event occurs offsite, that does not insulate the company from a claim of workplace misconduct. Limiting or even entirely eliminating the alcohol served at a company party may reduce the risk of employees behaving inappropriately.”
Your lawyers (and insurance broker or agent) will likely tell you that the best policy is not to serve alcohol at your event, but if do choose to do so, here are some tips to limit your liability:
“Beware of liability associated with alcohol consumption at employer-sponsored events. Although employer liability for injuries caused by attendees at employer-sponsored events is different from state to state, employers could be liable under theories of common law negligence, vicarious liability, social host or “dram shop” liability (a type of liability that holds the provider of alcoholic beverages to someone who is obviously intoxicated liable for any injuries that those individuals later cause), and more,” says the BHMK law firm.
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