Liquor Liability at Company Events

company party drinksA guide to safer celebrations


The holiday party, with a buffet dinner and hosted bar, has become a beloved tradition for Emerald Enterprises employees. But last year, a department manager, feeling relaxed after his third vodka tonic, got a bit too familiar with a new sales person. She filed a complaint with HR and consulted an attorney, and though no charges were filed, the incident was costly in both time and morale. This year’s party planners face a tough choice. The employees won’t be happy if they ditch the drinks, but has having an open bar become too much of a risk?

A company party offers the opportunity to build goodwill and camaraderie among your staff. Offering alcoholic beverages makes the event festive, but puts your business at risk. Trips and falls, sexual harassment, and drunk driving are just a few examples of things that can go wrong when party-goers over-indulge. Fortunately, there are ways to serve up the good times along with a twist of safety.


Before the party: Draft the rules
As with any employee expectation, your company’s first step is to create a policy, in writing. Even if you only sponsor one or two corporate events a year, it’s important to have written documentation that outlines employee responsibilities and expected behaviors at business-related functions. Include a copy of the policy along with all invitations to corporate events, to ensure everyone is aware of the rules. In addition to offering some legal protections, this also demonstrates to your insurance company that you take liquor liability seriously.

You should also speak with your insurance agent to make sure you have proper liquor liability coverage. Laws vary by state, but it’s best to assume that, should an alcohol-related incident occur during or after the party, your business will be legally responsible for damages.


During the party: Serve a few shots of precaution
Though you can’t guarantee an employee—or a guest—won’t tie one on, you can create an atmosphere that encourages responsibility.

  • Make attendance optional if alcohol will be served at the event.
  • Serve drinks to guests rather than offering a self-serve bar.
  • Set up bar stations instead of having servers circulate the room. If offered, people are inclined to accept drinks they wouldn’t have otherwise ordered.
  • Place signs at each bar reminding employees and guests to drink responsibly.
  • Don’t price alcohol too low, as it encourages overconsumption.
  • Offer a range of low-alcohol and alcohol-free drinks at no charge.
  • Require servers to measure spirits.
  • Always serve food with alcohol.
  • Close the bar an hour before the scheduled end of the party.
  • Do not offer a “last call,” as this promotes rapid consumption.
  • Never raffle alcohol or hold contests that involve buying or drinking alcohol.
  • Entice guests to take advantage of safe transportation options by subsidizing taxis or promoting a designated driver program.

You can also reduce your risk by hiring a professional caterer or bartender service. If you are working with third-party vendors, your risk management program should include the following guidelines:

  1. Verify that all vendors you work with are licensed and insured.
  2. Stipulate in your vendor’s contract that only those who have received alcohol-awareness training should serve or sell alcohol at your event.
  3. Require the vendor to provide a certificate of liability insurance that includes liquor liability coverage, naming your company as an additional insured.


After the party: Put a cork in any issues
What if, despite all your precautions, someone drinks too much and problems arise? Any incident, no matter how minor, should be documented in writing. Complete this liquor liability incident report to document the measures taken to control the intoxicated person. This report can aid in your defense if an alcohol-related accident occurs.


Stay in the spirit of the season
After serious deliberations, the owners of Emerald Industries decided to keep with tradition. They worked with their insurance agent to craft a tighter employee alcohol policy, and required everyone attending the event to sign off. They will also be issuing drink coupons to limit consumption. It’s a compromise everyone thinks is fair.


If you’d like additional information on managing your company’s liquor liability risk, contact your General Southwest Advisor at 480-990-1900.


Article by Lisa Binsfeld.  Adapted from Liquor Liability Guide,
This information is not intended to be exhaustive nor should any discussions or opinions be construed as legal advice. Examples included in this document are for information purposes only; for specific coverage details consult your insurance policy. Contact legal counsel or an insurance professional for appropriate advice.

Emerald Enterprises is a fictitious company, events listed are for illustrative purposes only.

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