Balancing culture and compliance: managing risk at company events

Employer liability fluctuates with each event. An on-site luncheon assumes a different risk than a happy hour at a local venue. Extra precautions should be taken if alcohol, travel or off-site venues are involved. Any vendor or venue contracts should also be reviewed for insurance requirements.

Risks associated with company events may include

• alcohol-related incidents, including overconsumption and impaired judgment

• injuries, such as slips, falls, or activity-related accidents,

• harassment or inappropriate behavior, particularly in less formal environments,

• transportation risks, especially if alcohol is served or travel is involved, and

• third-party liability exposure at off-site venues.

Depending on your organization and event types, the following coverage may be necessary.

• General liability insurance, which covers bodily injury or property damage claims that may arise during company-sponsored events.

• Liquor liability insurance is critical if alcohol is served. This may be included in a broader policy or require separate coverage.

• Workers’ compensation may apply if an employee is injured at a company-sponsored event, especially if attendance is required or strongly encouraged.

• Employment practices liability insurance (EPLI) protects against claims of harassment, discrimination or wrongful conduct that could occur.

• Event-specific coverage may be necessary for larger or off-site events to fill potential gaps.

Insurance policies should not be the first or only line of defense for risk mitigation. Safeguards should be put in place prior to an event, outlining expectations, and minimizing the chance of incidents. Clearly communicate that workplace policies still apply, even in social settings. Harassment, disorderly conduct or other behaviors prohibited within the regular workday should extend to company-sponsored events. If alcohol is provided, consider offering drink tickets to those of the legal drinking age to prevent overconsumption. Providing rideshare credits or shuttles is a more costly alternative but negates the risk of impaired employees driving.

By aligning culture-building initiatives with thoughtful risk management strategies, organizations can create engaging, memorable events while minimizing liability. Partnering with experienced advisors ensures your approach is both compliant and aligned with your broader risk management strategy.