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Be aware of liability when serving alcohol at company-sponsored functions

With the holiday season in full swing, many companies are hosting events with alcoholic beverages provided. Business owners and managers should recognize that there is a legal liability associated with providing alcohol at these types of events that is not entirely unlike the risks borne by your local tavern owner or caterer.

The courts have frequently held sponsors of events responsible for tragedies that have ensued when impaired individuals are involved in accidents. When an entity provides intoxicating beverages to others, it is taking on at least some of the risk of an individual’s actions who is under the influence. The provider of alcohol also bears the risk that the alcohol will end up in the hands of minors.

While no technique is fool proof, we have provided some best practices to follow when your company hosts an event where alcohol is served. These are not intended to be a killjoy, but a way to make sure that you are taking steps to provide a safe event and avoid legal liability.

Consider not providing alcohol at all. A viable risk management option is to avoid the exposure altogether and prohibit any provision of alcohol at a company function. While some employees may feel cheated, there are ways to help soften any negative impact. For example, consider buying gifts or prizes to distribute with the funds that would have gone towards purchasing alcohol.

Especially at those events where children would be in attendance, precluding the opportunity for a minor to consume alcohol may be the best approach. What’s more, by not providing alcohol, an overall more enjoyable time may be had by all.

Provide plenty of non-alcoholic options. A primary risk management technique, and frankly one of the easiest measures to employ, is to be sure that there are plenty of non-alcoholic options at your event. You never want to find yourself in a position where you are being held liable for the actions of an intoxicated person who was only provided an option of an alcoholic beverage at an event you sponsored. Make sure that there is plenty of soda, bottled water, iced tea, lemonade and other non-alcoholic options from which to choose. For every alcoholic option you provide, you should consider having two or three other options that are non-alcoholic. It is a good idea to provide plenty of food and activities so it is clear that you are not hosting a purely drinking event. This also helps participants pace themselves in their consumption of alcohol.

Investigate the possibility of having the alcohol catered and poured by another party. Especially when an event is somewhat formal and organized, it might be possible to avoid some liability and over consumption by having a third party vendor handle the serving and pouring of alcohol. While hiring a professional doesn’t totally shield the host of the event from liability, professional caterers and bartenders are usually trained to spot guests who have had too much to drink and to limit consumption by over-imbibing guests. Professionals are trained to handle these delicate situations in a professional manner. For example, they are trained to spot underaged guests. As added protections:

  • Carefully review contracts with the vendor. Ask if a Hold Harmless Agreement for the benefit of your organization is possible.

  • Request evidence of liability insurance—at minimum, in the form of a certificate of insurance.

Plan for adequate management supervision and have alternative transportation plans in place. Have key members of management refrain from consuming any alcohol to properly monitor the event, and have alternative transportation plans in place for anyone who has had too much. Having a party monitored by a few people in authority who are not consuming alcohol can help to spot concerns before they turn into big issues. In no event should a member of management encourage the consumption of alcohol or participate in overdrinking, such as drinking games. Alternative transportation arrangements and plans should be prepared in advance by the event coordinator or manager to handle such situations as a precaution. Contact local cab companies to ensure availability—they may be able to offer you reduced or special rates. Another idea is to coordinate a team of designated drivers (perhaps your management team) and make it absolutely clear that they are to remain alcohol-free for the event. If a cash bar is involved, consider providing non-alcoholic beverages at no charge to designated drivers.

Do not be afraid to address the clearly intoxicated participant. In any and all communications, clearly state that while alcohol will be provided, prospective attendees are expected to respect all others at the event and refrain from becoming intoxicated. Remind employees that, even though they are not in a formal workplace environment, they are still representatives of your bank in the community and should act as such. Ultimately, they are both your company’s responsibility and potential liability at work-sponsored functions. Also, it should be stated that management will not hesitate to provide for the safety of all participants—including calling the police if an intoxicated person attempts to operate a vehicle or behaves in a way that could put him/herself or others in peril or danger.

Limit the number of drinks that any one individual can have.

Institute a drink ticket system whereby each adult is issued or sold tickets to a set maximum amount for alcoholic beverages to use during the event. Make it clear that the tickets are not transferable to other attendees. Since most events are usually over in just a few hours, tickets allocating for two to three drinks per individual should be plenty.

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