Hosting a Company Holiday Party: Do’s and Don’ts for Employers

By Joshua Lavine, CEO, Capitol Benefits  ·  Last updated November 9, 2026

A company holiday party is a business event, which means the employer can carry real liability for what happens there, and that risk rises sharply once alcohol is served. The four things to settle before the invitations go out are hiring a licensed caterer or bartender who carries liquor liability and asking for the certificate, keeping attendance voluntary, limiting alcohol and offering rides home, and confirming what your general liability, host liquor, employment practices and workers compensation policies actually cover.

The year-end party is one of the simplest ways to thank a team for a year of hard work. It should be a good night that people talk about for the right reasons. A little planning ahead keeps it that way, and it protects the business that is hosting it.

Why a party is also a business risk

When a company hosts an event, it takes on responsibility for the people who attend. A few situations come up more than any others:

• A guest is injured, for example by slipping on an icy entrance or a wet floor at the venue.
• Someone has too much to drink and is involved in an accident after leaving. Laws on host responsibility differ across DC, Maryland, and Virginia, but even a claim that is eventually dismissed can be expensive to defend.
• A conduct complaint follows the event, such as an allegation of harassment between coworkers.
• An employee is hurt at an event they were expected to attend, which may be treated as a work-related injury.

The do’s

• Do hire licensed professionals to serve alcohol. A caterer or bartending service that carries its own liquor liability coverage is trained to check IDs and cut people off. Ask for a certificate of insurance and, where possible, to be named as an additional insured.
• Do keep the alcohol in check. Drink tickets, a bar that closes an hour before the party ends, plenty of food, and good non-alcoholic options all help.
• Do make getting home easy. Rideshare credits, a group rate at a nearby hotel, or a shuttle cost far less than a claim.
• Do keep attendance voluntary, and say so in the invitation.
• Do give a friendly reminder about expectations. A light note that workplace conduct policies still apply, and managers who set the tone, go a long way.
• Do read the venue contract. Many venues require specific insurance or ask you to take responsibility for certain losses.

The don’ts

• Don’t ask managers or employees to tend bar. It puts them in a hard position and puts the risk squarely on the company.
• Don’t serve anyone who is underage or visibly intoxicated.
• Don’t turn the party into a business meeting. Save performance conversations, promotions, and bonus news for the office.
• Don’t assume the venue’s insurance protects your company. It is written to protect the venue.
• Don’t forget errands. If an employee picks up supplies or drives guests in a personal car, that trip can raise auto liability questions for the business.

What Maryland, DC and Virginia law says about hosts

The rules on host responsibility are different in each of the three places we serve, and they are narrower than many owners expect. Here is the general picture.

Maryland. Maryland generally does not hold a bar or a private host responsible when an adult guest drinks and later causes an accident. The important exception is underage drinking. In 2016, Maryland’s highest court held that an adult who knowingly and willfully allows someone under 21 to drink at their home can be held liable for the injuries that follow (Kiriakos v. Phillips). If interns, seasonal staff or family members under 21 will be at your party, keep alcohol away from them.

Virginia. Virginia courts have consistently declined to hold those who serve alcohol responsible for injuries caused by an intoxicated adult, and they place that responsibility on the person who drank (Williamson v. The Old Brogue, 1986).

District of Columbia. DC courts have held that a restaurant or bar can be liable for serving someone who is visibly intoxicated (Rong Yao Zhou v. Jennifer Mall Restaurant, 1987). Whether a private host, such as an employer throwing a party, is held to the same standard is less settled.

Two practical points matter more than the case law. Being sued is not the same as being found liable, and defending a claim costs money either way, which is a large part of what host liquor coverage pays for. And when the company puts on the event, an injured person may also argue that an employee was acting within the scope of the job, which is a separate question from host liability. This is a general overview, not legal advice, and your attorney can speak to your specific situation.

Check your coverage before you send the invitations

Host liquor liability and liquor liability are two different things, and the difference matters on the one night a year you serve alcohol to your staff. The standard liquor exclusion in a general liability policy applies to businesses that are in the business of manufacturing, distributing, selling, serving or furnishing alcohol. An employer who simply hosts a party usually sits outside that exclusion, which means host liquor coverage is already inside the general liability policy you carry. The caterer, venue or bartender actually pouring is in that business, and their liquor liability certificate is the document to ask for before the event.

Two things to confirm with your broker rather than assume. Host liquor coverage does not respond the same way to a claim involving someone underage or someone who was already visibly intoxicated, which is why cutting off service matters more than any policy wording. And if drinks are sold at the party rather than provided, ask how your carrier reads the exclusion, because selling alcohol is the trigger it is written around. Source: IRMI, Liquor Liability Exclusion in the CGL.

Many general liability policies include host liquor liability for businesses that are not in the business of selling or serving alcohol, but limits and exclusions vary. If you are renting a venue, the contract may require coverage you do not currently carry, and a one-day special event policy can fill that gap. Employment practices liability insurance is designed to respond to harassment and discrimination claims, including those tied to company events. Workers compensation may apply to employees injured at a work event, and hired and non-owned auto coverage protects the business when employees use their own cars for company errands.

A reasonable next step

Once you have a date and a venue, send us the venue contract and a quick description of the event. We will confirm what your current policies cover, flag any gaps, and help you get the right certificates in place so you can enjoy the celebration with your team.

Frequently Asked Questions

Does general liability insurance cover alcohol at a company party?
Many general liability policies include host liquor liability for businesses that do not sell or serve alcohol as part of their operations, but it is not universal, and limits and exclusions vary. Confirm it with your advisor before the event.

Can an employer be held responsible if a guest drives home impaired?
It depends on the state and the facts. Host liability rules differ across DC, Maryland, and Virginia, and claims can still be costly to defend. Limiting alcohol and providing safe rides home is the best protection.

What if an employee under 21 drinks at a company party in Maryland?
That is the situation Maryland law treats most seriously. An adult who knowingly allows someone under 21 to drink at their home can be held liable for injuries that follow, so the safest approach at any company event is to make sure no one under 21 is served. Check IDs if the venue does not.

Should a company holiday party be mandatory?
Keeping attendance voluntary is the safer choice. When an event is required, injuries that happen there are more likely to be treated as work related.

What should we ask a caterer or venue for?
Ask for a certificate of insurance showing general liability and liquor liability coverage, and ask to be named as an additional insured. Read the venue contract for any insurance or indemnification requirements.

Does employment practices liability insurance cover claims from a holiday party?
EPLI is designed to respond to claims such as harassment or discrimination, including ones that arise at company events, subject to the terms of the policy. It is worth knowing whether you carry it before the party.

Related reading from Capitol Benefits

• General liability insurance
• Commercial insurance from Capitol Benefits
• Talk with a Capitol Benefits advisor