12/06/2013 07:50 pm ET | Updated Feb 05, 2014

The Small-Business Owner's Guide to Safe Holiday Parties

This year, a healthy 96 percent of American businesses will have holiday parties, according to research firm Battalia Winston. That's up from an all-time low of 74 percent in 2011, when post-recession penny pinching led many firms to trim the fat, rather than the trees, come December. The return of the office party is a good sign for the economy at large, but it also means more companies will be at risk for expensive, alcohol-related incidents this holiday season.

Consider this case currently working its way through California's court system. In 2009, after attending a holiday party for employees of a Marriott hotel in California, one man drove home, then went on a second car ride. He was intoxicated at the time and hit another car, killing its driver. The driver's family reportedly sued the man and the Marriott for wrongful death.

The driver was sentenced to six years in jail, but the trial court agreed with the Marriott, that the hotel couldn't be held liable because the driver had gone home before the car ride that ended in a fatal crash. Four years later, however, the case is still mired in appeals, meaning that the Marriott is dealing with the bills associated with a lengthy litigation process.

For a smaller business, those costs alone could be devastating, regardless of the ultimate outcome.

As this story illustrates, the potential for catastrophic outcomes following alcohol consumption is very real. Luckily, there are simple steps you can take to protect your business, your employees and others following a holiday party that includes alcohol.

Here's a guide for how small-business owners can avoid disaster when hosting holiday parties this season, even if the workplace bash is just days away.

  • Know the laws where you live.

Liquor liability laws are different in every state. In some parts of the country, social host liability means party hosts or property owners can be held legally responsible for the actions of people who were served alcohol at an event -- whether or not those hosts actually provided the alcohol. In some cases, holding your party at a bar, restaurant, or other venue can disperse this liability by spreading it among the various hosts.

  • Limit alcohol consumption.
  • Offering tickets for drinks, not serving hard alcohol, operating a cash bar and having a third party serve guests helps prevent heavy drinking. Business owners can limit the likelihood of drunkenness by serving food and nonalcoholic drinks as well as booze and having a firm closing time. Keep in mind, though, that these measures aren't failsafe: In the case mentioned above, the Marriott served only beer and wine, and distributed just two drink tickets to employees; the man named in the lawsuit apparently brought his own flask of hard liquor.

  • Host the party on a weeknight.
  • People are less likely to overindulge when they know they have to be at work bright and early the next morning.

  • Provide transportation home.
  • As is illustrated all too vividly in the Marriott case, drunk driving can cause serious physical injury and death to both drinkers and other drivers. To minimize the likelihood that anyone causes disasters on the road following your holiday party, arrange for designated drivers, taxis or shuttles to get your team home safely after the festivities.

  • Verify your insurance policies.
  • If you live in a state where you could have liability for alcohol-related incidents, check your General Liability Insurance policy (or call your agent) to see if you're protected from potential lawsuits. Many GL policies include liquor liability coverage for holiday parties and other events where you serve (but don't sell) alcohol to guests. If you're not covered, consider adding this coverage as an endorsement.

    People in small businesses work incredibly hard every day to help their businesses succeed, and at the end of the year they enjoy much-deserved celebrations. Taking extra steps this holiday season will ensure that your employees, and your business, are safe as you celebrate your achievements.