Private events with open bars represent some of the highest liquor liability exposures restaurants face. When guests aren't paying per drink, consumption tends to increase significantly. Understanding how to price, manage, and insure these events protects your business while allowing you to profit from private dining.
Why Open Bars Increase Risk
Open bars remove the financial feedback loop that naturally limits consumption:
- No per-drink cost to make guests pause before ordering
- Social pressure to 'get your money's worth'
- Event hosts focused on hospitality, not monitoring consumption
- Servers may be less attentive to individual consumption
- Time-limited events encourage faster drinking
Host Liquor Liability vs. Commercial Liquor Liability
Understanding the difference between these coverages is critical for event planning:
Host Liquor Liability
Covers hosts who serve alcohol at events but don't sell it. This is what your event client needs if they're bringing their own alcohol to your venue.
Commercial Liquor Liability
Covers businesses that sell or serve alcohol as part of their operations. This is what you need as a restaurant providing alcohol at the event.
Key point: If you're providing the alcohol (even if included in a package price), you need commercial liquor liability. Your client's host liquor coverage won't protect you.
Managing Open Bar Risk
- 1.Package pricing: Instead of unlimited open bar, offer drink packages (4-5 drinks included per person)
- 2.Time limits: Limit bar service duration rather than offering open bar all night
- 3.Drink tickets: Issue drink tickets to control consumption and create a natural limit
- 4.Bartender training: Ensure bartenders are trained on event-specific protocols
- 5.Food requirements: Mandate substantial food service alongside alcohol
- 6.Last call timing: End alcohol service well before event end
- 7.Water and non-alcoholic options: Make alternatives prominent and attractive
Contract Requirements for Private Events
Protect yourself with proper event contracts that address:
- Indemnification: Client indemnifies you for their guests' conduct
- Guest counts: Accurate headcounts for proper staffing and service
- Underage guests: Client responsibility for preventing underage service
- Transportation: Encourage or require transportation arrangements
- Your right to cut off service: Explicit right to stop serving intoxicated guests
- Security requirements: For larger events, require professional security
Insurance Considerations
Your Liquor Liability Policy
Standard liquor liability should cover private events at your venue. However, review your policy for:
- Any exclusions for private events or banquet operations
- Per-event coverage limits (some policies have them)
- Guest count limitations
- Requirements for professional bartender service
Client Insurance Requirements
For large events, consider requiring your client to provide:
- Certificate of insurance naming you as additional insured
- Host liquor liability (if they're bringing alcohol)
- Event liability coverage
Frequently Asked Questions
What if the event host wants us to serve past the point of intoxication?
Your liquor license and your liability. Never let an event host pressure you into over-serving. Train staff that they have full authority to cut off any guest, and back them up when they do. Include this right explicitly in your event contract.
Does my GL policy cover private event alcohol service?
No. General liability excludes liquor liability for businesses that sell or serve alcohol. You need specific liquor liability coverage, whether standalone or as part of a package policy.