Office parties and company-sponsored social functions can be great morale boosters for a company. These functions give employees in different departments and at different levels in an organization a chance to become better acquainted in a low-pressure setting. Office parties can be a good opportunity to celebrate companywide success and make employees identify with and feel that they are an appreciated part of the organization. Unfortunately, there are also some significant risks associated with sponsoring social functions, particularly functions where alcohol is served.
Employers that choose to sponsor social events should be aware of the problems that can arise and should take certain precautions. Most of the time, a party or picnic will go off without a hitch, but any social event brings the possibility, however slim, for personal injuries, third-party injuries, and sexual harassment. Also, accidents at a company-sponsored party may result in claims under both workers' compensation and general liability insurance.