It may not be ultimately the employer's decision. It may be due to their insurance. However, I would go to your employer and make the case as stated ^^^^^^^^^^^above^^^^^^^^^^^. It might also be a good idea to find out if there are other cc'ers in your place of employ and ask them to join you. There is strength in numbers.
Exactly. I don't own a company anymore, but when I did I would look at the following:
1. What do I feel is the right thing to do?
2. What is the impact either way from an Insurance perspective?
3. What is the impact from a Legal perspective?
4. What message does this send?
As a business owner you want to do things that will protect you / your business / your employees first, and then look at it from the perspectives of perception (internal and external) and cost. You can usually find a reasonably inexpensive way to do the right thing - although that is certainly biased by the beliefs of the business owner.
The best advice often came from a good attorney familiar with working with small businesses (having familiarity with, but not necessarily an expert on, topics like HR and insurance). Often I would be instructed that a "do nothing" approach provided the greatest flexibility and protection. Sometimes it would just be a policy statement (e.g., a policy to call a taxi and expense the fee if you are ever drinking during a work related function or trip).
It took a little work and money up-front on my end to get the input needed to make the final decision, but that equated to a few hours of my time, usually $250 or less, and a wait of up to a week. This is where lionround's comment about "strength in numbers" could help, but you definitely want to do things in the right way (i.e., build a positive and brief business case, don't be abusive, no threats, etc.).
Hope that helps.