A bartender is legally liable for serving alcohol to a patron who becomes intoxicated and then injures a third party. Does a business face a similar exposure when it hosts a social event where alcohol is served, such as a holiday party, an open house or employee picnic?
According to the Insurance Information Institute, liquor liability exposure is not limited to those whose primary business is the sale of alcoholic beverages. Most states currently have social host statutes or common law that holds private event hosts liable for the actions of their guests. You are considered a social host if you provide alcohol to individuals in a non-commercial manner. It is important to know the law in your jurisdiction and to take the appropriate steps to control your risk.
An important first step in limiting your liquor liability is to implement a risk management program. The liquor liability program must have the support of management, be communicated to supervisors and employees, and include a policy advising employees to drink responsibly at company events.
The program should outline the procedures for handling intoxicated guests. This includes delegating who will assess the situation, such as hotel security or someone from your organization, and outlining appropriate actions for dealing with or removing a guest who has overindulged.
If an incident occurs, fill out a liquor liability incident report documenting measures taken to control the intoxicated person and helps your defense in the event of an alcohol-related accident.
In addition to proper liquor liability planning and education, review your company’s current general liability insurance policy to determine your coverage in social-host situations.
Remember, even with the proper coverage, a liquor liability policy does not eliminate your exposure if alcohol service is in violation of a statute, a minor is served, or an already intoxicated person is served.
It’s also important to have a program in place that includes the following recommendations when working with third-party vendors:
To promote the safety and sobriety of your employees and guests at company-sponsored events, review the following recommended control measures:
Before your company hosts its next event, contact us at Neckerman Insurance Services. We can review your coverage and assist in developing a risk management plan that keeps safety at the center of your company-sponsored events.
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