Deck the halls with boughs of holly and don your ugly sweater because ’tis the season to be jolly — at the company holiday party.
You want to show appreciation to your employees with some relaxation and merrymaking, but along with the fun comes some added insurance exposure. This is particularly true if you plan to serve alcohol.
Smart Business spoke with Andrew Rowles, vice president at SeibertKeck Insurance Agency, about how to plan ahead to ensure your company has a safe and covered holiday party.
What do employers need to know about liquor liability?
Liquor liability is coverage for the consumption of alcoholic beverages, so you want to make sure this is in place if you plan to serve alcohol. Some points to keep in mind are:
- Be careful when selecting a caterer and venue. Ask if they have experience with handling liquor exposures, such as over serving, TIPS (training for intervention procedures) program, etc.
- Check to see if your current insurance policy will include coverage for host liquor liability — that is if you provide the alcohol for free.
- Some parties have a cash bar, so confirm that the caterer has a policy and contract that is in favor of you if a guest or employee is over served.
- Make sure you discuss if your holiday party is only for employees or also includes customers/vendors.
When might your employment practices liability policy kick in?
Coverage for a hostile work environment could be created at a holiday party, if there is harassment or inappropriate games or jokes. So, make sure you have this in place before a fight breaks out over who got the bigger Christmas bonus.
Also you may need coverage for third-party liability. For example, a claim could arise if a non-employee, such as someone working the holiday party, accuses an employee of an inappropriate act, such as making an unwanted advance.
How are temporary or leased workers covered?
To cover short-term demand around the holiday seasons, many companies engage temporary or leased workers to assist with the extra workload. In every insurance policy, there are specific definitions that will define ‘who is an insured.’ It is important to clearly understand the difference that is outlined in your policy and review if they are covered under your liability insurance.
Many companies overlook the importance of properly structuring the insurance policy, but having your insurance policy cover the actions of a temporary or leased employee could be important at a holiday party, or at your company, if things get out of hand.
What are other kinds of coverage that could be useful to consider?
Event liability insurance protects you if someone causes property damage to the venue or is injured at the event. Many commercial general liability policies have minimal coverage for leased/rented facilities, with limits typically at $100,000. Special events policies can be purchased for a minimal charge — sometime as low at $150 — depending on your party attendance. Purchasing a special events policy could help reduce your liability for a holiday gathering.
Event cancellation insurance is coverage to reimburse the company due to a canceled or postponed event for unforeseen events, such as bankruptcy, vendor issues, weather, etc.
Hired and non-owned auto liability is coverage written to protect your company if you are named in a lawsuit because of an employee driving on your behalf.
It’s important to think about what possible business exposures your holiday brings — before the fun starts. That way you can plan, with the help of your insurance agent or broker, how to minimize the risk so your merriment isn’t spoiled.
Insights Business Insurance is brought to you by SeibertKeck
