Risks of Company Sponsored Sports Activities

Q. Our company managers are talking about sponsoring such sports activities as softball or basketball for our employees.  What are the risks we should be looking at?

A. The risks are scary.  This is one of those times when you must consult with your attorney and insurance agent before sponsoring or encouraging any employee group, social activity or sports event — on or off your property.

There are two main areas of concern:

  1. Workers’ Compensation and employer’s liability. What if an employee is injured or killed while attending or participating in a company-sponsored activity? You open the company to liability if you, as the employer, derive any substantial direct benefit from the employee’s participation in the event.  For example, you might sponsor a sports team and throw an awards banquet to further the goodwill of the employees toward you.  You could be liable for damages if an employee is injured in a game between supervisors and employees, or if an employee is injured while driving to the company awards banquet.
  2. Increased medical claims and costs. Consider the impact on the cost of your health insurance if your company-sponsored activities increase the likelihood that employees will be injured.

Note: The circumstances surrounding each event or activity determine whether or not you have a liability exposure, or whether you risk increasing your Workers’ Comp and health insurance costs.  This is why you must run the details by your attorney and insurance agent.


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