It’s the season of celebrations and many businesses like to get in on the fun and throw their own Christmas party toward the end of the year. These parties typically allow employees to indulge in food, alcohol, and games to let loose after a busy year.
As a business owner, it is important to consider the risks with this type of event. Even though these parties can benefit the company culture, they can also be a minefield of insurance claims and lawsuits.
At Swarts, Manning, and Associates, we guide our clients through minimizing risks before the party starts so you can relax and enjoy the party instead of worrying about potential claims. Here are five areas where we see the biggest risks, and our suggestions to avoid them:
5 Ways to Minimize Risk at a Holiday Party
1. Alcohol
At parties like these, it is common for some employees to celebrate to the point of intoxication which can lead to a wide array of problems. Employees can lose their filter, linger under the mistletoe, or trip and fall when competing in office games. And because the alcohol was served by your business, you may be at risk of a potential #MeToo harassment case or workers compensation claim.
Manage the risk
Most Commercial General Liability (CGL) policies include coverage for liquor liability which will help manage many of the risks mentioned above. Prior to the event, confirm your CGL policy does not have a liquor liability exclusion. If it does, we recommend that you purchase coverage as soon as possible (ask us how). Reduce your liability further by providing drink tickets and ensuring controlled pours.
2. Attendance
If you plan to require attendance, and not compensate your employees for their time, you may have a Wage-An-Hour exposure. Additionally, even if the event is not “required”, employees may claim they attended under duress due to office political pressure.
Manage the risk
We recommend hosting the event on company time to avoid these risks. If you insist on having it after hours, make sure your communications clearly state duties for non-exempt and exempt employees.
3. Accommodations
When planning your event, be sure to accommodate all types of dietary restrictions and be mindful of allergies as this can be life-threatening. Also, note that your business can be held responsible for employees who over-indulged in their eggnog. Employees who drink and drive can not only hurt themselves, but also hurt others. In the event your employee causes a serious and/or fatal accident, you are at risk of being found negligent.
Manage the risk
Arrange accommodations to get people home safely. Designate members of the executive team to check people before they leave and offer rides to people who seem too drunk to drive. If you host a large event, consider offering free Uber/Lyft rides for everyone in attendance. Doing so will display clear intent to preserve your employees’ wellbeing.
4. Religious Sensitivity
America is a melting pot of different cultures and beliefs. As such, your staff most likely is as well. Employee religious commitments should be considered when determining the location, time, and the food that is being served at your event. Also, pay attention to what you name your event. If you decide to call it a “Christmas party”, you may offend those who do not practice Christianity.
Manage the risk
Familiarize yourself with your staff and their various religious beliefs. If potential religious conflicts arise, ensure that all aspects of the party are acceptable. Also, consider changing the name of your party to a “Holiday Party” or “End of The Year Celebration.”
5. Communications
If only the upper management and ownership are aware of the measures that the company has implemented to ensure everyone has a great experience, then these preventative steps can fall short. The party information should be communicated clearly and often.
Transfer the risk
We highly recommend communicating the company’s code of conduct and reiterating your policies for drinking and transportation more than once. Also, ensure that an Employment Practices Liability Insurance (EPLI) policy is in place. EPLI protects against various employee lawsuits including sexual harassment, wage and hour, and discrimination claims. Unfortunately, current events have also warranted the consideration of Active Shooter Insurance coverage.
