When it comes to events that involve alcohol, here's the bottom line: Hosts face being held liable for the actions of their intoxicated guests. Such liability may include damages for property loss, as well as for personal injuries to the intoxicated person and to third parties.
An organization can be held liable for damages resulting from having served alcohol under two principal codes: 1) statutory liability under state liquor liability laws or 2) common law liability under the theory of social host liability. The former, often referred to as dram shop acts, prohibit the sale or delivery of alcohol to any visibly intoxicated person or to minors. Although dram shop acts have traditionally applied only to commercial servers of alcohol (bars and liquor stores), courts often interpret them to apply to anyone who sells alcohol.
Common law liability applies directly to unlicensed servers of alcohol. Corporations are typically unlicensed, noncommercial servers that can be--and are--held liable as social hosts.
Courts have imposed liability on social hosts. So what's the prudent planner to do? Here's a six-pack of suggestions to help minimize potential liability at any function where liquor will be served.
1. Eliminate open bars, punch bowls, and beer kegs. The days of help-yourself bars are long over. Without supervision, guests are more likely to drink too much, substantially increasing the likelihood that they will injure themselves or others. Don't sponsor or host any event at which unsupervised drinking takes place, including informal gatherings in hospitality suites. Not only does unsupervised drinking lead to the likelihood of increased intoxication, but a judge or jury could later find that a failure to provide supervision amounted to negligence, a basis for imposing punitive damages.
2. Don't let alcohol be the sole focus of an event. Make sure sufficient quantities of food and non-alcoholic beverages are available for guests. This will reduce the probability that people leave the event inebriated.
3. Serve alcohol for a reasonable time. Alcohol should not be served for too long or too short a period of time. Avoid service intervals that do not allow guests to pace themselves, and don't make a "last call" announcement. Consider using a system that provides some control over consumption. For example, even when drinks are free, give guests a limited number of drink tickets.
4. Hire a trained bartender. Never allow the organization's employees or members to serve drinks. If you hire a professional, the bartender or his or her employer comes between you and potential liability. Professionals have been trained to recognize when to stop serving someone, and they are usually covered by someone else's insurance.
5. Arrange designated drivers. Arrange for a service to provide transportation for guests who may have had too much to drink. Tell attendees about the service before the party.
6. Get insurance. You can't eliminate all potential liquor liability, so obtain the appropriate insurance coverage. If the event is hosted at a hotel, convention center, or other facility, it helps to have the facility name the host organization as an additional insured.
Remember: A preliminary dose of prudence can avoid later liability hangovers.