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Holiday parties: 22 ways property managers can protect against liability

Legal Concerns Resident Retention

Holiday parties for your residents or employees can be great fun! Shared memories at events like these can help property managers build and maintain a sense of community—which helps at lease renewal time. As strictly employee functions, they can also be terrific team-building events, and a good way to thank hard-working employees for everything they’ve done over the previous year and kick off the New Year with a bang.

However, as you plan events like this, holiday party liability should be on your mind. Consider the following scenarios that could expose your property management company or homeowners association to liability:

  • Someone at your party—an employee or a resident—has too much to drink, gets in the car, and causes a wreck resulting in property damage, injury, or fatality.
  • A manager gets drunk and sexually harasses an employee or resident.
  • Someone posts a raucous video from the party, and someone else suffers harm to their reputation as a result.
  • An employee or resident objects to the religious theme of the holiday party and uses it as evidence of a hostile work environment.
  • An employee gets injured by falling off a ladder while hanging decorations.

The first step to avoiding holiday party liability issues is to learn more about common missteps that put companies at risk. Let’s learn about liquor liability and social host liability laws, as well as the steps that you can take to nip event liability issues in the bud during this year’s festivities.

Holiday Party Liability

Liquor & Social Host Liability Laws

If you are serving alcohol at your event, you are subject to liquor liability and social host liability laws in your state. In a nutshell, under liquor liability laws in at least 44 states, you or your company can be held liable for any injuries or harms that arise as a result of serving alcohol to an underage person or to someone who is already intoxicated.

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22 Tips to Protect Your Company from Holiday Party Liability

Here are some specific steps that you can take to minimize your potential exposure to holiday party liability—or any other social event, for that matter.

1. Let residents or the HOA board take the lead on holiday party planning, and execute only those tasks delegated by the board of directors and their event planning committee representatives.

2. Choose seasonally themed decorations rather than overtly religious ones. A Christmas tree is generally acceptable, as is a menorah when accompanied by a Christmas tree. Courts have defined these as essentially secular symbols for the purposes of applying discrimination and hostile work environment case law. A nativity scene won’t pass muster in court if a complainant uses it as evidence of a hostile work environment.

3. Have the party in a reasonably conservative establishment. Stick to more family-friendly venues rather than nightclubs.

Holiday Party Liability:

Event Liability Insurance

4. Consider event liability insurance. Contact your insurance broker and ask about event liability insurance, sometimes called “party insurance.” If you are serving alcohol, ask about a liquor liability insurance policy specific to the event. Many insurance brokers will sell a policy for a one-off event at a very affordable premium.

5. Check your commercial general liability insurance policy. This policy should cover businesses’ damages due to ordinary office activity, including holiday parties—subject to deductibles and policy limits.

6. Consider purchasing employment practices liability insurance (EPLI). This coverage provides protection against claims arising from sexual harassment and discrimination. Ideally, you should have a ‘third party coverage’ rider to protect your company against claims from non-employees. For example, suppose that a guest at your party harasses one of your workers. Unless you have the third party rider in force, your standard EPLI policy may not cover the claim. Your commercial general liability insurance won’t protect you against liability arising from claims of harassment or discrimination from non-employees against employees of your firm.

Holiday Party Liability:

Liquor Liability Concerns

7. Make it known that management will pay for cab rides for any attendee who needs one. Alternatively, rent a van or bus to drive employees home, or rent hotel rooms at or near the venue.

8. Make ‘last call for alcohol’ 1-2 hours before the end of the event.

9. Have a bartender. Don’t let employees pour their own drinks. Again, catering companies have their own insurance policies to help protect themselves and their customers, so if the worst happens, your company won’t be alone in paying damages. The bartender should be trained in refusing service to anyone visibly intoxicated.

10. Stick to beer and wine.

11. If you have liquor, have the bartender control it, and pour only mixed drinks. No shots.

12. Have plenty of food available. Food slows down the absorption of alcohol into the system, potentially reducing the level of intoxication.

13. Use a cash bar. For most staffers, having to pay for their own drinks has a healthy deterrent effect.

14. Be sure to have nonalcoholic drinks available. Consider making these free, while guests and attendees purchase their own alcohol.

15. If you do provide the alcohol gratis, consider a ticket system: Give each guest two drink tickets, for example—and make them non-transferrable.

Holiday Party Liability

Employee Events

16. Make attendance strictly voluntary for employees.

17. Don’t hold the party during work hours.

18. Make it clear to employees that the party is unpaid. If you pay employees to attend, or otherwise imply that the party is mandatory, then any injured workers have an easy claim on your worker’s compensation policy.

19. Keep work separate from the event. Don’t give out awards or bonuses, announce promotions, hold work meetings, or invite vendors or customers. This party is strictly for fun. You want to keep the party as ‘social’ as possible and make it totally unmistakable as a social gathering and not a work event. The reason: If a court finds that attendance at a company holiday gathering occurred in the course of employment, they will frequently hold employers liable for the actions of any employees.

20. If you are going to serve alcohol, have the party offsite. This makes it tougher for a plaintiff to claim that it’s a work activity—and even if they make the case, a restaurant or bar has its own trained staff to prevent incidents, and insurance to help cover any alcohol or DUI-related claims.

21. Verify whether your insurance covers contract employees with your insurance broker and legal staff. The staffing agency normally has coverage of their own, but it’s still good to check. Your company could be held jointly and severally liable with the staffing agency if a contract employee is accused of harassment or discriminatory language at the party.

22. Encourage employees or residents to bring family. The presence of family may discourage excessive drinking, and also buttresses any later argument you may want to make in court that the event was a social event, not a business one.

On the #BuildiumBlog: 22 tips for property managers hosting holiday parties to avoid liability issues. Click To Tweet

Do you plan on holding a holiday party for your residents or employees? Do you have any advice? Tell us all about it in the comments!

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Jason Van Steenwyk

Jason is a freelance writer and editor, as well as an avid fiddler. His articles have been published in a number of real estate publications including Wealth and Retirement Planner and Bankrate.com. He lives in Fort Lauderdale, FL with his cat, Sasha, and an unknown number of musical instruments.

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