Company-Sponsored Parties: Risks and Mitigation Strategies

Many people look forward to a company-sponsored party this time of year as an opportunity to relax and spend some quality time getting better-acquainted their co-workers in a fun environment. It’s a great time to boost morale at the end of the year, reflect on the holiday season and get the workforce energized and enthusiastic about the year to come! However, employers must be mindful that work-related parties and events also come with safety and liability risks. We’ve outlined some of the common risks below and detailed some mitigation strategies that you can implement to reduce your exposure.

Common Risks of Company-sponsored Parties

• ‍Alcohol-related issues: Under certain laws (e.g., dram shop laws or social host liability), employers may be held liable if alcohol consumption at a company event results in harm to others. If employers choose to serve alcohol at workplace events, it is important to take measures to limit its availability. This can include providing drink tickets, avoiding spirits or hard alcohol, refraining from offering an open bar, and restricting bar hours or the event duration to encourage moderation. Hiring professional bartenders can further enhance safety by verifying guests’ legal drinking age, monitoring intoxication levels, and refusing service when necessary. Additionally, offering a variety of nonalcoholic beverages and considering daytime events can promote a safer environment. When alcohol is served, it is crucial to stop service well before the event ends and arrange transportation options, such as rideshares or shuttles, to ensure everyone gets home safely. Providing food at the event can also help reduce intoxication risks by preventing guests from drinking on an empty stomach.
• Food safety concerns: Ensuring that the food served is safe to consume can help employees avoid food hazards and reduce scenarios that could lead to workers’ compensation claims or damage employee trust. To enhance food safety at workplace events, consider hiring certified caterers who adhere to proper food safety standards and provide a variety of food options to accommodate allergies and dietary needs. During food preparation, it is important to prevent cross-contamination and ensure proper food temperature control—keeping hot foods hot and cold foods cold. Providing hand sanitization stations for attendees is another key safety measure. Additionally, it’s best to avoid potlucks, as the ingredients and preparation methods of homemade dishes can be difficult to verify.
• Physical hazards: Employers may be held liable for slips, trips, falls and other accidents, especially if alcohol is involved, if it’s demonstrated that they caused or failed to address these unsafe conditions. They may also face related workers’ compensation claims. Event organizers should perform a pre-party safety inspection to identify and address potential hazards, such as wet floors, trip risks (e.g., loose cables, uneven surfaces), and blocked exits. To minimize slip risks, use nonslip mats in high-traffic areas, mark slippery zones with signage, and promptly clean up spills. Decorations should be placed carefully to avoid obstructing exits or walkways and to prevent additional risks, such as falling objects or tripping hazards. Additionally, having an incident response plan in place ensures any issues that arise can be handled effectively.
• Harassment and misconduct: Employers can be held liable for harassment or discrimination that takes place during company-sponsored events. Before the event, business leaders should remind attendees of conduct expectations and anti-harassment policies, emphasizing that company policies remain in effect, even for off-site or after-hours events. Designating supervisors to oversee the event can help monitor behavior and address issues promptly. Reducing or eliminating alcohol availability can further mitigate risks associated with impaired judgment and inappropriate actions. Additionally, avoiding games involving physical contact or dance activities in the festivities can help minimize the likelihood of improper conduct.
• Inclusivity, accessibility and diversity considerations: Creating inclusive, accessible events that show respect for diverse populations can reduce the risks of these allegations of discrimination. Event planners should select themes with broad or seasonal appeal to promote inclusivity and ensure the celebration feels welcoming to all. It should be explicitly communicated that attendance is optional and that choosing not to attend will not result in any negative consequences. To avoid the perception of exclusivity, steer clear of themes that cater to only a specific group of attendees. Additionally, ensure the event is accessible to individuals of all abilities and that activities and decorations are considerate and respectful of everyone.

In addition to the precautions outlined above, business leaders should confirm they have appropriate insurance coverage for their events. Standard general liability and commercial property insurance may not fully address potential risks, depending on the event's location, activities, and specific details. Consulting with a licensed insurance professional can help ensure the business obtains the necessary coverage tailored to its needs. Reach out to Concierge Insurance Group for any additional questions!