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Limiting social host liquor liability. A bartender is legally liable for serving alcohol to a patron who becomes intoxicated and then injures a third party. Does a business face a similar exposure when it hosts a social event where alcohol is served, such as an open house or employee picnic or a holiday party?

Anytime you provide alcohol to individuals in a non-commercial manner, you are considered a social host. After the Supreme Court of Canada’s decision in Childs v. Desormeaux, social hosts generally are not responsible for the acts of guests that consume alcohol. However, a social host may become responsible for the acts of their guests if their conduct creates or exacerbates a risk to the public. It is important to take the appropriate steps to control your risk.

Create a risk management program

An important first step in limiting your liquor liability is to implement a risk management program. The liquor liability program must have the support of management, be communicated to supervisors and employees, and include a policy advising employees to drink responsibly at company events.

The program should outline the procedures for handling intoxicated guests. This includes delegating who will assess the situation, such as hotel security or someone from your organization, and outlining appropriate actions for dealing with or removing a guest who has overindulged.

Liquor Liability insurance

In addition to proper liquor liability planning and education, review your company’s current general liability insurance policy to determine your coverage in social-host situations.

Remember, even with the proper coverage, and events and liquor liability policy do not eliminate your exposure if alcohol service is in violation of a statute, a minor is served or an already intoxicated person is served.

It’s also important to have a program in place that includes the following recommendations when working with third-party vendors:

  • When working with a vendor, such as a caterer or a bartender service, verify they are licensed and insured.
  • Stipulate in your vendor’s contract that only those who have received alcohol-awareness training should serve or sell alcohol at your event. In British Columbia, a person serving alcohol needs serving It Right license.
  • Require the vendor to provide a Certificate of Liability Insurance to include events and liquor liability coverage naming your company as an additional insured.

Promoting safety and sobriety at company-sponsored events

To promote the safety and sobriety of your employees and guests at company-sponsored events, review the following recommended control measures:

  • Having a well-established written policy against drinking and driving and promulgating that policy,
  • Serve drinks to guests rather than offering a self-serve bar.
  • Set up bar stations instead of having servers circulating the room; if offered, people are inclined to accept drinks they wouldn’t have otherwise ordered.
  • Place table tents at each bar reminding employees and guests to drink responsibly.
  • Monitoring the alcohol consumption of each employee (and having sober individuals in charge of doing so).
  • Don’t price alcohol too low, as it encourages over-consumption.
  • Offer a range of low-alcohol and alcohol-free drinks at no charge.
  • Require servers to measure spirits.
  • Not serving shots or “doubles” or “triples”.
  • Always serve food with alcohol.
  • Prohibiting drinking games.
  • Refuse to serve intoxicated guests.
  • Close the bar an hour before the scheduled end of the party.
  • Do not offer a “last call” as this promotes rapid consumption.
  • Never raffle alcohol or hold contests that involve buying or drinking alcohol.
  • Entice guests to take advantage of safe transportation options by subsidizing taxis or promoting a designated driver program.
  • Intervening if necessary, and confiscating the car keys of an intoxicated guest.
  • If your event includes a program or speaker, schedule it for after dinner and drinks are served. This allows additional time for alcohol to wear off.
  • Have proof that you followed the above points – the rule of three! (email the message three times before the event as proof of communication)

As an employer, you have a general duty to:

  • Take reasonable care for the safety of your employees.
  • Not introduce into the workplace conditions that introduce a foreseeable risk to the employees

As a business host, your main responsibilities are:

  • Monitoring alcohol consumption of guests
  • Taking every reasonable step to ensure that guests are not exposed to foreseeable harm.

If you do not fulfill your legal obligations as an employer and business host during a social function and injuries occur as a result, you could be found liable for:

  • Injuries to your employees; and
  • Third parties who are injured by your employees.

Courts in Canada have imposed liability on business/employer hosts where:

  • The employer provided alcohol to an employee.
  • The employer had knowledge that the employee was intoxicated.
  • The employer failed to take sufficient steps to prevent the employee from driving.

To succeed in an action against a business host, a person (employee, guest, or a third party) would need to prove:

1. That the employer or business owed him/her a duty to take reasonable care;

2. That the employer or business failed in that duty of care.

3. That there was a causal connection between the breach of the duty and the injury;

4. That damages suffered were “reasonably foreseeable” (serious personal injury is considered a reasonably foreseeable result of intoxication).

With the holiday season fast approaching and before your company hosts its next event, contact Reliance Insurance Agencies, Ltd. We can review your coverage and assist in developing a risk management plan that keeps safety a top priority at your company-sponsored events.

Check out: Liability Insurance

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