The office holiday party. It’s one of the most popular events of the season. It’s a great time for employees to socialize together away from work, and a chance for employers to give something back to their workers for their hard work throughout the year.

But beware – those office parties can also be prime time for embarrassing moments and costly liabilities. In fact, did you know that the traditional company holiday party is one of the biggest risks many companies take?

It’s surprising how many otherwise cautious and level-headed companies will just “wing it” when it comes to holiday parties, without properly preparing for the risks. And yet, there’s a minefield of potential liabilities:

• Alcohol use and the potential for accidents and injuries
• Sexual harassment / assault
• Violence against a coworker or manager
• Injuries
• Food poisoning
• Damage to premises
• Reputational damage

It’s one of the biggest risks – but it’s also one of the most avoidable risks.

If you want a happy, safe, and disaster-free holiday party, you need to conduct the same kind of formal risk assessment that you would for any other aspect of your business operations, and thoroughly document your mitigation efforts.

Before your next holiday party, check out these risk management tips: 

• Make sure all employees know your policies on acceptable behavior and the consequences of noncompliance.
• Be cautious and responsible about providing alcohol, and provide transportation for those who may have a few too many.
• Don’t make attendance mandatory.
• Identify and eliminate any potential safety hazards at the party venue, outdoors and in.
• Don’t hang mistletoe – you could be inviting a sexual harassment suit.
• If an incident happens, respond quickly, conduct a thorough investigation, and stick to your policies and procedures.
• If your business will be open the day after the party, let your employees know that they need to be at work as usual and should conduct their evening accordingly.

What about potential COBRA eligibility issues?

What if one of your employees gets out of hand at your company party and has to be terminated? Is that employee still eligible for COBRA? That depends. If the behavior is considered “gross misconduct,” the employee won’t be eligible for COBRA. But it’s not always cut and dry. You would have to prove that the employee was fired due to gross misconduct. If you get past that hurdle, the terminated employee and any potential beneficiaries would have to be notified that they’re no longer eligible for COBRA due to termination for misconduct, and they can still appeal. Needless to say, thorough documentation of the incident, the employee’s exact behavior, the resulting termination, and the denial of COBRA coverage are crucial.

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