Is your office hosting a holiday party? On occasion, it is common for offices to come together to celebrate events, whether it is the retirement celebration, holiday or birthday party, client party and office-sponsored sports activities. These business events may offer their employees alcoholic beverages. Is it possible that a company or a business can be held responsible for the injuries or damages that result from serving alcohol? Is the current insurance program ready to address this concern? Do you think it would be important to purchase a special insurance for this? In most states there are alcohol laws, familiarly called Dram Shop Laws, which determine a business entity’s liability for the dangerous outcomes from serving alcohol. Laws vary, however most assign liability for serving persons who are minors or who are intoxicated.
The Commercial General Liability (CGL) is a comprehensive policy that companies purchase because it provides coverage for Liquor Liability, with the EXCEPTION of covering businesses (those in the business of’ selling, serving, or manufacturing alcoholic beverages). If the event offers alcohol without a charge, it could be stated that the insured is not ‘in the business of’ selling or serving. If persons are charged to drink, even if the charge is only to compensate for the alcohol’s expense, this situation could create a whole different legal situation. Not having coverage such as CGL, leaves a company unprotected if an incident like an accident or injury occurs. In some circumstances you may need a “Host Liquor Liability” endorsement.
Some businesses have decided that hiring a bartender at their event will reduce their risk of being held liable. This idea offers the benefit of another party being held primarily responsible and reducing the amount the business might be required to pay. Obtaining proof from the bartender to confirm that he or she carries Liquor Liability insurance, is the main issue. It is important that the bartender’s proof is obtained PRIOR to the event. If not, it may be too late when you find out that there isn’t a policy or that the limits are inadequate.
Drinking and driving is another major issue that society is less tolerant of. A driver under the influence of alcohol who causes an auto accident is much more likely to be sued. Besides the lawsuit against the driver, a lawsuit will likely include a business that provided that driver alcohol. The business is considered as contributing to the loss and is called on to share or fully cover the cost of injury or damage done. With the great amount of money awarded in lawsuits, a judgement against a person can have a crucial effect on their business, so purchasing a Commercial General Liability insurance policy could provide the necessary defense for the business.
Example: Business A and Business B are both insured by CGL policies and each company recently sponsored a pre-celebration New Year’s Party. After each party, a very intoxicated employee leaves. Before reaching home, he or she causes a collision. The injured drivers sue drunken employees along with the businesses. Business A is an accounting office and its CGL handles the lawsuit. Business B is a tavern; its CGL denies the claim.
The solution would be to discuss the types of events with your business sponsors or hosts with your agent to determine if you need to purchase special coverage. This may also help you form guidelines to decrease the amount of potential lawsuits. It may be more safe to ban drinking during business hours, and perhaps hold a family-friendly party. If this is not your businesses plan, the suggestion is to make sure there is provided transportation after leaving the events, be clear with your employees before the festivities begin, or have a drink limit or an alcohol-free party. Your insurance agent can assist you in determining ways to protect your property.
If you have any questions about your existing policy, are inquiring information about a possible future policy or need further information, please call us at (631) 738-7300 or get a quick quote at www.vrpinsurance.com
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