A corporate client asks your restaurant account to run the open bar at its office holiday party. The owner books the date. Two weeks later, the company’s event planner asks for a certificate of insurance, and it's the first that you, the agent, hear about the job. Whether the client’s bar and restaurant insurance responds at the office depends on how the policy describes insured premises and operations, and on what the client told the carrier at application. Agents can work through three checkpoints before the party: policy wording, the contract with the event host, and licensing.
When the restaurant’s staff pours drinks at the client’s office, the restaurant remains the business that sells or serves the alcohol, so the liquor exposure stays with the restaurant. Liquor liability insurance responds to claims arising from alcohol service, but each policy defines where and how the insured operates. Some forms list specific scheduled premises. Others describe the insured’s operations in terms that may or may not include catering.
Bar and restaurant insurance programs differ on this point. Pull the declarations page and the policy’s operations description, and look for catering or off-premises service by name. If neither appears, ask the underwriter in writing whether the policy extends to the event. If the carrier never underwrote catering, it may dispute or deny the party's claim, leaving the restaurant to pay defense costs and damages itself. The certificate the planner requested won’t settle the question because a certificate only shows that a policy exists, not that its terms have changed.
The holiday calendar adds pressure to get the answer right. In December 2023, 1,038 people died in drunk driving crashes, according to the National Highway Traffic Safety Administration. Picture a guest who keeps drinking at the office party, drives home, and injures someone in an accident. In states with dram shop laws, the injured person may sue the business that served the alcohol (conditions that vary by state). At a catered party, the restaurant served the alcohol, not the company that hired it. The restaurant would turn to its liquor liability policy, which only applies if it covers service at the office.
The company hosting the party carries a different kind of alcohol exposure. The Insurance Risk Management Institute defines host liquor liability as liability for injury or property damage arising from alcohol served by a party not in the business of serving alcohol, and notes that standard general liability policies can insure it. The company throwing the party fits the definition, so its own general liability may respond to claims against it. The restaurant does not fit, because serving alcohol is its business. As a result, the restaurant cannot count on the host’s general liability and needs its own liquor liability that applies at the event.
An injured guest’s attorney may still name both the company and the restaurant. To shift some of that risk, event hosts write insurance requirements into catering agreements, such as additional insured status, indemnification, minimum limits, and primary and noncontributory wording. In the opening example, the planner asked for a certificate. Before the client signs, ask for the full catering agreement and compare each insurance requirement with the policy. If the annual policy does not extend to off-site locations, ask the underwriter whether separate liquor liability insurance for an event is available.
Coverage questions assume the client can legally serve at the event. A base liquor license may not authorize off-site service. In California, the Department of Alcoholic Beverage Control (ABC) issues a Type 58 caterer’s permit that allows certain on-sale licensees to cater alcohol off-site. The permit alone does not authorize a specific event. The licensee must also obtain ABC authorization for each catered event, so a client with three holiday bookings needs three authorizations. Ask whether the client has applied for each one, not only whether it holds the permit.
An adjuster reviewing a claim may look at whether the client held the required authorization, so read the liquor liability form for exclusions tied to liquor law violations. Each state sets its own rules, so ask clients how they handle permits wherever they cater.
Whether the account is a restaurant or a tavern written under a program of insurance for bars, ask these questions as soon as the client mentions off-site work:
Alcohol supply and payment: Is the client selling its own inventory or pouring alcohol the host bought, and who pays for the drinks? The answers can affect which licensing rules apply and how a claim would describe the client’s role.
Staff: Do the bartenders work for the client? If the host supplies them, ask the underwriter whose policy would respond to their conduct.
The restaurant, from the opening, can still close a coverage gap if its agent catches it before the owner signs. At that stage, the agent can ask the underwriter about extending the policy or placing event coverage, and the client can decide whether to take the job. Contact RMS Hospitality Group to discuss restaurant and bar accounts that include off-premises service, and bring the event details and the host’s agreement.
At RMS Hospitality Group, our expertly crafted policies are written specifically for the hospitality industry. We offer custom-tailored solutions to meet any venue’s specific needs. For more information, contact our knowledgeable experts today at (888) 359-8390.
