Holiday Party Planning & Insurance: Key Risks


It’s that time of year again: holiday party season. Holiday parties offer coworkers the opportunity to socialize, network, and celebrate the year’s accomplishments. While there’s nothing wrong with having fun, companies should be aware that there are a number of very serious risks surrounding company parties and events.

What are the Risks Associated with Company Holiday Parties?

One of the major factors contributing to risk at company events and parties is alcohol. Most states have liquor liability laws, which means any business serving alcohol could be held liable for injuries or damages if they wind up serving an underage or intoxicated person. These laws are meant to regulate bars and restaurants, but in some states, those serving alcohol at private or corporate functions can also be found responsible.

Whether or not booze is flowing, employees socializing after hours can lower their inhibitions and act inappropriately. For example, employees have reported sexual harassment or discrimination that took place at corporate-sponsored events. Things get especially complicated when guests include non-employees, such as spouses or clients.

Speaking of discrimination, holiday parties that focus on one religion can lead to certain groups feeling left out, and subsequently potential legal issues.

Additionally, labor law violations could be considered if employees feel that they are required to attend an event for business purposes outside of their normal, paid working hours.

Protect Your Business: Special Events Liability Insurance & Beyond

The first step a business can take toward reducing the risks associated with holiday parties? Get insured. It’s important to have insurance no matter how careful you are – even if your business is not found at fault for an incident, the legal costs of responding to a claim can bankrupt you.

Many businesses purchase Special Events Insurance to protect themselves in these scenarios. Special Events Insurance covers a variety of costs associated with events, from postponement due to weather to replacing a vendor at the last minute. It can also cover liability if your company is found responsible for property damage or a third-party injury caused during your event. Some policies also cover your guests, including medical and personal injury costs associated with an incident that occurs at the holiday party.

Additionally, companies serving alcohol on-premises may be required to purchase liquor liability insurance or host liability insurance, depending on their location and the situation.

Another important policy that can protect your business in case of harassment or discrimination claims is Employment Practices Liability Insurance, or EPLI. If customers or non-employee guests are invited to attend, ensure that your EPLI policy extends coverage to them as well.

Isn’t this already covered by my General Liability?

General Liability Insurance does cover third party claims of injury and property damage – but your policy likely doesn’t extend to events that happen outside of normal business operations, like a holiday party.

There are several reasons you may need additional insurance in this case. For example, your event might have too many attendees, or your General Liability policy may not extend to events that serve liquor.

Every situation is different, so depending on the type of event you are hosting, your General Liability policy may in fact have you covered – just check it carefully before you pop a cork.

Holiday Party Preparedness Tips

If you’re responsible for planning your company’s holiday festivities, here’s a list of things to consider to reduce your business’s risks:

  • Discourage employees from driving home intoxicated by offering taxi reimbursements or arranging transportation.
  • If holding the party on company property, hire a catering company or professional bartenders to serve food and alcohol, and require that they provide proof of liability insurance, naming your company as an Additional Insured.
  • Ensure your company’s harassment and employee conduct policies specify that they also extend to social events.
  • Require proof of licensing and insurance from third party vendors contracted for the event, as well as from the venue if the party will be held off-premises.
  • Keep holiday parties religiously and culturally neutral to ensure that all feel included and welcome.
  • Hold the party outside of work hours, and emphasize that attendance is optional.

Don’t let the unexpected ruin the holiday season – protect your business by following the tips outlined above and purchasing comprehensive insurance policies, and you can party on.