Across the UK, employee Christmas parties are an age-old tradition. But they can be a risky endeavour for organisations. The potential for bodily injury and property damage rises exponentially when a roomful of uninhibited co-workers engages in a little fun and merriment.
It’s important for your organisation to avoid getting caught up in the Christmas spirit and consider the potential risks and how to mitigate them. Providing comprehensive event insurance is a possibility, but it’s better to reduce those risks from the outset with the advice outlined in this article.
Where Responsibility Lies
Office Christmas parties are held outside of working hours but employees are still there on company business. And whilst it’s wrong to say that your organisation is liable for everything that happens, there are many instances in which an employer can be responsible for the actions of an employee at an office Christmas party.
Since it depends on the circumstances, it’s best to assume that the employees’ actions can be construed to be the responsibility of the employer for the purposes of insurance. Prepare accordingly by considering the worst-case scenario.
What to Do as An Employer
If a party is held at a venue, it’s a good idea to make sure said venue has some kind of public liability (PL) coverage. Make sure that the PL insurance extends up to and including the date when the party will be held (including after midnight, when most policies expire) and sufficient for the number and seniority of the staff attending. For example, a high-earning member of staff, falling down negligently looked-after stairs, can reach a total claim cost of as much as £20m (loss of earnings, medical care for rest of life, house/car adaptations etc) – and that’s just for a single employee. Many smaller venues have only £5m or £10m of PL cover. You should check their cover limits and that the policy has been endorsed to cover third party events held at the premises.
Holding the event offsite is recommended. It reduces the risk of business property being damaged or incapacitated. However, choose the location wisely, to ensure that everyone can reach it and return home safely. It may be prudent to arrange group transportation as necessary.
Also, make sure that any decorations are in line with insurance policy stipulations. The last thing your organisation needs is to have a claim denied over a technicality.
Take measures to limit the consumption of alcohol – within reason. If alcohol is provided at the event, drink tokens and other forms of quantity control can help prevent things from getting out of hand. Also, put in place standards of conduct for the party that you require employees to follow. If their attendance at work the next day is expected, that can also help keep things civil and limit potential problems to a minimum.
A detail some consider minor, but which can massive problems, is mistletoe at an employees’ Christmas party. You could avoid the potential for harassment complaints by making sure it’s nowhere in sight on the party premises; however, this may seem harsh.
The basic rule of thumb is to have clear expectations laid out for your employees. This should include a clear stance on any discrimination and harassment. In addition, it’s a good idea to remind employees about your organisation’s policies prior to the event. Make sure managers and supervisors know how to handle any potential issues that might spill over from the workplace. Such de-escalation policies (“post-loss event control” in risk management speak) can make all the difference between a minor incident and a major brawl.
Be Careful about What Ends up Online
There are also risks that should be considered regarding data protection. Inappropriate messages or images could be damaging to the reputation of individuals or the organisation as a whole. There’s not much you can do at the time, but you can reduce the risk by setting boundaries beforehand. Make sure employees are aware where such behaviours can be problematic and the consequences for overstepping the mark.
What to Do from An Insurance Standpoint
First and foremost, check your own public liability coverage in whatever form it takes; make sure you’re well covered.
Speak with your insurance agent to find out what options you have for one-off event insurance for something like a Christmas party. Many insurers have insurance plans designed for this sort of event. For the peace of mind provided, it might be a more than acceptable expense. You might also find insurers that specialise in event insurance that can provide more details about what to expect and how to reduce potential risk at a Christmas party.
Don’t Let the Celebration Turn Sour
Ultimately, an organisation can eliminate all risk connected to an employee Christmas party by not holding one at all. However, this is unlikely to go down well, and the social capital that’s created at a Christmas party is well worth it for employers in the long run.
Just make sure you do everything you can to minimise the associated risks. Set clear and reasonable expectations and go over some of the common problem areas at Christmas parties. Also, double-check your insurance coverage. If more insurance is needed, consider one-off event insurance, but be aware of the policy terms and conditions – many of these policies are very cheap, but are worded to only respond if your own insurer denies the claim, in other words, you must already have insurance in place, the “event” policy is often just a “gap cover” in case your own insurer declines your claim; be clear whether you are buying additional cover (eg to cover a £20m claim instead of a £10m claim) or a “gap” cover (to cover a £10m claim if your existing insurer will not).
John is an actuary and owner and Director of HJC Actuarial, which he founded in 2003 and which has advised over 100 clients since its’ inception. He has worked in the insurance industry for 30 years, qualifying as an actuary in 1995 and becoming a Partner in a major global consulting firm in 2000. Since 2003 he has provided independent advice to his clients on optimal insurance program design, presentation of risks, premium negotiation with insurers, insurer solvency assessments, policy wordings, insurer selection, and insurance broker selection.