Avoid a Christmas party liability disaster

Party season is almost here, which should give both hospitality businesses and businesses organising Christmas shindigs much food for thought beyond the turkey, tinsel, and mince pies.

Those opening up their premises to revellers should check that all liability covers are in place. Employer liability insurance is a legal requirement, protecting the business should an employee suffer injury or illness due to work-related activities. If your cover has expired, you can be fined up to £2500 per day. Do check the documentation.

Welcoming members of the public onto the premises makes public liability insurance another key cover. If you injure a guest or customer or damage their property, whether by leaving a wet floor unguarded or spilling gravy onto their designer clothing, the policy will protect you.

Christmas is a key income-boosting time for many businesses, so safeguard against unexpected closures caused by events like fire or flooding. Business interruption insurance can be a lifeline, covering the income you would have earned under normal circumstances.

You may also need product liability insurance, if serving your own food and drink fayre to revellers. Maybe professional indemnity insurance is required to prevent your business from being sued if you plan an event that goes horribly wrong? Also, remember that cybercriminals will know you are busy over the festive period and will pay less attention to that phishing email or deepfake impersonation scam. Consider arranging your cyber liability insurance before opening the first door of your Advent calendar – it’s a smart way to stay protected during the busy season.

The risks posed by vicarious liability

But if organising a staff works ‘do’, reflect on vicarious liability. Are you aware that employers can be held responsible for employees’ actions and wrongful acts “closely connected” to their employment?

Often, these are fuelled by alcohol consumption, high jinks or a combination of the two. Anything, from personal injury to sexual harassment, could occur. Even at work Christmas parties, ‘off duty’ is not really ‘off duty’ if the employer lays on the event. It is seen as an extension of the workplace. The law’s view is that “employers are held vicariously liable for any wrongful acts committed by their employees in the course of their employment.”

The common duty of care is a highly flexible concept, and it is something party organising employers must consider. Robust risk assessments must examine a venue and event’s risks and how alcohol consumption might amplify those.

Consider games, activities – even moves on the dance floor – and what might result. Factor in the need for designated supervisors or security guards. Make sure employees get clear guidance on what you deem acceptable behaviour and mirror this in employment contract wording. Having employees sign and formally accept responsibility for their own actions is a wise step.

Proactively try to prevent sexual harassment, too. Failure to do so is a costly mistake at tribunal, with a new duty under the Equality Act 2010 introduced in October 2024 and a potential uplift of 25% to the employee’s compensation if the employer is deemed to have failed in its duty of care to prevent the issue. Christmas parties can sometimes lead to misunderstandings or inappropriate behaviour, so employers need to remain attentive and proactive.

Even if vicarious liability is eventually not proven, the legal costs incurred can be immense. It required two hearings, the second at the High Court, in the case of Shelbourne vs Cancer Research, to determine that the charity was not responsible for an employee’s injuries, after she had been lifted and dropped on the dance floor by a visiting scientist.

So, carry out the proper risk assessments, consider all potential scenarios and mitigate the risks, documenting all actions taken, well ahead of the party. Employers may also be well-advised to protect against vicarious liability claims by taking out Employment Practices Liability Insurance (EPLI).

Keep in mind that employers may still be held liable for an employee’s actions if they are closely connected to the employee’s role, even if they occur outside regular working hours or off-site. This highlights the importance of clear behavioural expectations and appropriate supervision at work-related events.

Talk to us about vicarious liability, how it works and the risks to your business and let us help your party pop, rather than implode.