05/ 16/ 2007
by Tami Kamin-Meyer
If you're a boss about to host a company party, your to-do list might look something like this:
Cheese and crackers? Check.
Fresh fruit and vegetables? Check.
Plenty of ice and cups? Check.
Review insurance liability policy? Umm…
What? You did not review your company's insurance policy to determine your potential liability should an employee/party attendee drink too much booze, drive under the influence and injure or kill someone?
According to Carol Nelson, an independent Ohio human resources consultant with more than 25 years of experience, you should take some precautions if you are hosting a party where alcohol is served. "Small-business owners need to consider risks and be sure they are covered for those risks," Nelson says.
In November 2006, a Virginia-based insurance and financial services advisory firm wanted to learn what percentage of Americans planned on hosting a party between Thanksgiving and the Super Bowl. The results of the survey, commissioned by Trusted Choice and conducted by an independent research company, were released Dec. 11, 2006. Of the 1,009 adults questioned nationwide, more than half did not own a personal umbrella policy. That type of policy is critical if a host is sued, since it goes above and beyond the protection afforded by most homeowner's insurance policies. If a host is sued and his insurance cannot pay all the judgments against him, his business and its assets could be at stake.
According to Nelson, an employer can be found liable if an employee drinks too much at a company picnic and then drives drunk.
"If you let an employee leave a company event where alcohol was served, and he's drunk, you can be liable," Nelson says.
Not so fast, cautions lawyer Bill Case of Columbus, Ohio.
A partner at Thompson Hine with more than 25 years of experience in civil litigation, Case says employers are not necessarily liable should their employees drink at a company function and then drive.
Dram shop laws govern employer liability in such circumstances, Case says. In many states, such as Ohio, case law actually favors the employer. "Some states have stronger, pro-employer statutes where liability is concerned," he says. However, legislation and case law regarding employer liability varies from state to state, so Case advises employers to not only review their insurance policies, but to discuss ways to reduce their potential liability with their lawyer.
Case offers some suggestions employers can put into action to help reduce their liability, even in jurisdictions where their potential culpability is likely to be low.
According to Case, employers can:
- Dole out drink tickets to limit alcohol consumption
- Hire a taxi to ferry drunk employers home
- Hold the party at a hotel and offer either free rooms or discounted lodging to encourage people to sober up overnight
- Hire a bartender rather than allowing people to serve themselves
- Serve plenty of food
- Be sure plenty of non-alcoholic drinks are available
- Collect keys as people enter the party, with the provision that the keys will only be returned if the driver is sober
Party invitations should include a statement that proper decorum is expected, despite the festive occasion, Case says.
Very sobering, indeed.
Tami Kamin-Meyer is an attorney and writer in Ohio.
