Host Liquor Liability and Your Company’s Holiday Party: Are You Covered?

By: Ben Cavallo, CIC, AAI, CISR

Together with partner Keith Signoriello, Ben Cavallo is the principal and co-owner of C&S Insurance.

Coworkers. Drinking. After hours. What could possibly go wrong?

Each year, countless social host liability suits emerge in the wake of office holiday parties. So before you and your team hit the karaoke bar, brush up on these key insurance considerations.

What is host liquor liability?

Host liquor liability refers to any bodily injury or property damage that arises from you serving alcoholic beverages (assuming you’re not in the business of doing so—i.e. you are not running a bar or a restaurant). For example, if an employee gets hurt trying to tip over the office vending machine (after drinking alcohol your company provided), you could be at fault. If he or she causes an accident while driving home from the party, you could also be at fault.

Does my company’s general liability insurance cover liquor liability?

In many cases the answer is yes. Host liquor liability is not an exclusion of most commercial general liability policies. But it never hurts to contact your insurance agent and check.

Is general liability coverage enough?

When it comes to physical damage and injuries, general liability insurance may have you covered. But there’s a whole, wide category of non-physical damages that should also be on your radar—especially during holiday party season. One survey cited by the American Bar Association indicates that 29 percent of adults have observed or experienced sexual advances at office parties between people who work together.  Off-color jokes, inappropriate behavior: don’t assume your team is immune.

On this front, company leaders should consider investing in Employment Practices Liability Insurance (EPLI) coverage. An EPLI insurance policy can protect your business from real or alleged claims of discrimination, sexual harassment, and emotional distress.

What about clients and customers at a holiday party? Are they covered, too?

When you purchase EPLI coverage, be sure it extends third-party coverage. Third-parties could include any non-employees (e.g. clients, customers, or employee spouses). If one of these parties alleges wrongful conduct, third-party coverage can help limit your exposure.

What’s the final takeaway?

Unfortunately, many companies aren’t yet covered by EPLI, leaving them vulnerable to huge legal expenses. (Even before going to trial, defending an employment lawsuit—through the discovery phase, to a motion for summary judgment—costs between $75,000 and $125,000.) Protect your company and your peace of mind in 2017. Learn more about EPLI coverage today.

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