Alcohol shows up at all kinds of business occasions: an office holiday party, a client appreciation night, a gallery opening, a real estate open house, a winery tasting. If a guest drinks too much and causes an accident, the question of who's liable, and which insurance responds, depends on whether your business is in the business of selling or serving alcohol or simply hosting. This guide explains the difference between host liquor liability and liquor liability coverage. For a broader overview, see our liquor liability insurance page.
Two different exposures
Host liquor liability
Host liquor liability covers a business that serves alcohol incidentally, without selling it or being in the business of serving it. Examples:
- A company holiday party with a hosted bar
- A free glass of wine at an open house or client event
- A networking event where the business provides drinks at no charge
The standard commercial general liability (CGL) form generally includes host liquor liability by excluding liquor liability only for businesses "in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages." Check your policy, since some insurers modify this.
Liquor liability
Liquor liability insurance is for businesses that sell, serve or furnish alcohol as part of their business, such as bars, restaurants, breweries, wineries, caterers, liquor stores and event venues that sell drinks. The CGL liquor exclusion applies to them, so they need a separate liquor liability policy or endorsement. See our restaurant insurance page and liquor store insurance.
Gray areas
- Charging admission that includes drinks: may look like selling alcohol.
- Cash bars or drink tickets: generally sales.
- Wine-tasting fees at retail shops or galleries: may be considered furnishing in the course of business.
- Businesses with a liquor license: usually considered in the business, even if alcohol is a small part of revenue.
- Free drinks to attract customers: for example, at a salon or boutique, may raise questions.
When in doubt, ask your broker before the event and get the answer in writing.
California law: social hosts vs. licensed sellers
California generally protects social hosts. Under Civil Code §1714, a social host who furnishes alcohol generally isn't liable for injuries resulting from the guest's consumption, with an exception for an adult who knowingly furnishes alcohol at their residence to someone under 21.
Licensed sellers face different rules. California law allows certain claims against licensees who sell alcohol to an obviously intoxicated minor. Other states have broader dram shop laws that make sellers liable for serving visibly intoxicated people.
Even where liability is limited, a business can still be sued and face defense costs. Insurance pays for defense as well as covered damages.
Responsible Beverage Service training
California requires alcohol servers and their managers at on-premises licensed establishments to complete Responsible Beverage Service (RBS) training through the Department of Alcoholic Beverage Control. See California ABC – RBS training. Many insurers also look favorably on trained staff.
Events: who's responsible?
Hiring a caterer or bartender
If you hire a licensed caterer or bartending service to serve alcohol:
- Ask for a certificate showing liquor liability coverage
- Ask to be named as an additional insured on their liquor liability and general liability policies
- Confirm servers are RBS-trained where required
- Use a written contract that spells out responsibilities
Venues
Many venues require event hosts to carry liability coverage that includes host liquor, or require a licensed caterer. A one-day special event liability policy often includes host liquor liability.
BYOB events
Letting guests bring their own alcohol doesn't eliminate risk. Some venues prohibit BYOB without a licensed server, and local rules may apply.
Permits
Selling alcohol at an event in California typically requires a license or special event permit from ABC. Don't sell drinks without the right permit.
Office parties: reducing risk
- Hire licensed bartenders rather than having employees serve.
- Limit drinks with tickets, and close the bar before the event ends.
- Serve food and plenty of nonalcoholic options.
- Offer rides: rideshare credits or arranged transportation.
- Make attendance voluntary and keep it clear that drinking is optional.
- Remind managers to model responsible behavior and watch for problems.
- Check your policies: general liability for host liquor, workers' compensation for employees at work events, and employment practices liability for harassment claims that can arise at parties.
What liquor liability policies typically cover
- Bodily injury or property damage caused by an intoxicated person you served
- Legal defense costs
- Assault and battery, which is sometimes excluded or sub-limited; ask
Watch for exclusions for employees serving while intoxicated, service to minors, or service after hours.
Umbrella coverage
Serious alcohol-related accidents can lead to large claims. A commercial umbrella can add limits, but confirm it schedules your liquor liability policy as underlying. See follow-form vs. stand-alone umbrellas.
Checklist
- ☐ Decide whether you're hosting or in the business of serving alcohol
- ☐ Confirm host liquor coverage in your general liability policy
- ☐ Buy liquor liability if you sell, serve or furnish alcohol in your business
- ☐ Require caterers to carry liquor liability and name you as additional insured
- ☐ Get the right ABC permits before selling alcohol
- ☐ Train servers (RBS) and set event safety rules
- ☐ Consider an umbrella
Contact Alishahi Insurance or call (877) 711-4545 before your next event.
Frequently asked questions
What is host liquor liability?
Coverage for a business that serves alcohol incidentally, such as at an office party, without being in the business of selling or serving it. It's generally included in standard general liability policies.
Do I need liquor liability for a company holiday party?
Usually host liquor coverage under your general liability policy applies if you're not selling alcohol. Confirm with your broker.
Are social hosts liable in California?
Generally no, under Civil Code §1714, except an adult who knowingly furnishes alcohol at their residence to someone under 21.
What should I require from a caterer serving alcohol?
A certificate showing liquor liability coverage, additional insured status and RBS-trained servers where required.
Is RBS training required in California?
Yes, for alcohol servers and their managers at on-premises licensed establishments.
Alishahi Insurance · 439 N Canon Dr, Penthouse, Beverly Hills, CA 90210 · (877) 711-4545 · CA License #4348151. General information only. This isn't legal, tax or financial advice or a coverage determination. Coverage depends on policy language and underwriting, and rules vary by state.