Managing the risk of liquor liability

Wine Glass
Serving alcohol at parties can open firms to liability.

As the holiday season approaches, many firms will be planning holiday parties for their staff and/or their clients, and these parties often involve serving alcohol. Serving alcohol may encourage bad behavior and could result in employment liability claims. Drinking too much and then returning to work could result in poor professional decisions, culminating in professional liability claims. And of course, drinking and driving can cause serious accidents.

Most states have statutes that hold the server of alcohol responsible for the actions of those they serve. Under dram-shop laws, commercial servers of alcohol can be held legally responsible for serving minors or legally intoxicated persons who cause damage to themselves or third parties. Under social-host laws, those who serve alcohol in a non-commercial manner may be held responsible for the actions of guests who become intoxicated.

The only way to eliminate liquor liability is to avoid serving alcohol at your event. If that’s not an option, consider hiring a vendor such as a hotel or caterer to sell and serve the alcoholic beverages. Purchasing and serving alcohol yourself increases liability. Verify that your vendor is licensed, insured, and properly trained in safe alcohol service. Alcohol awareness training includes knowing how to recognize and prevent intoxication, and how to deal with and remove intoxicated guests if necessary. You may also want to provide transportation or lodging for guests who have over-indulged as well as create an environment that encourages responsible drinking by limiting the length of the reception, offering non-alcoholic choices, serving food, and limiting the number of bartenders serving drinks. You may also want to speak with your insurance broker about purchasing a separate liquor liability insurance policy.

Laws regarding liquor liability vary by jurisdiction. As always, we recommend discussing your exposure with local legal counsel that is knowledgeable about this subject.

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