The approach of the holiday season signals one thing: holiday P-A-R-T-I-E-S! Parties are a great way to show your appreciation for your customers and staff; however, they involve risks that need to be considered prior to planning a holiday soiree.
With a company-sponsored event, keep in mind that even though attendance is not required, you can be held responsible if something unexpected occurs. It comes as no surprise that some of the most frightening scenarios involve alcohol consumption. If you provide alcohol, whether through an open bar or vouchers, you have created a liquor liability exposure for your business. If someone drinks at your party and is involved in an accident, you could be held liable for damages, injuries or even death.
Liquor Liability is specifically excluded from general liability policies, because it’s only necessary if the insured is in the business of selling, distributing or manufacturing alcohol. If they are providing free alcohol, they are considered a host. Host Liquor Liability is not usually excluded; the general liability policy would, therefore, provide coverage. If you are planning an event, contact your insurance agent to verify that you have appropriate coverage and limits in place.
It is important to remember that just because you have coverage doesn’t mean you don’t have responsibilities when acting as a host. You should be very aware of who is drinking and how much they are drinking. If you have underage staff or guests, make sure they don’t have access to alcohol. Don’t let anyone who is obviously intoxicated drive a car. You should use the same guidelines that a bar or restaurant does.
You could also decide to have a “cash bar” where everyone must pay for their drinks. Before you decide where you are going to have the event, make sure the venues you consider have Liquor Liability insurance in place and discuss your expectations for controlling underage and excessive drinking. If the event is for staff, even though you didn’t provide the alcohol, some jurisdictions might consider it an extension of employment and hold you liable.
And while we’re on the topic of extension of employment, remember that when staff are representing your company (vendors’ parties, trade shows, etc.), they are “on duty.” Not only might you be held liable for anything they do, you might be responsible for anything that happens to them. This includes driving a car while running errands.
Host Liquor Liability doesn’t only occur when you have a party or event; some businesses offer their guests or customers a glass of wine. Certainly one glass of wine isn’t a problem, right? Well, not everyone reacts to alcohol in the same way. And, depending on their activities and food intake, one glass of wine might have a devastating effect. Use caution if this is a practice you wish to employ.
As always, the best way to protect yourself is to discuss any business activities with your specialized insurance agent. Whether it is a one-time event or an ongoing practice, they will be able to assist you in building the appropriate insurance portfolio and offer suggestions for making your business less susceptible to liability.
Jenny is Vice President of Universal Insurance Programs, based in Phoenix, AZ. She works with new and existing salon owners to determine and provide insurance coverage for their unique business models. Contact Jenny with any questions regarding your insurance at 800.844.2101 x1480 or email firstname.lastname@example.org.
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