Board Meetings. Serving wine at board meetings is not illegal but it could present problems. If directors drink excessively, their judgment will be impaired when making decisions for the association. Also, if they injure themselves on the way back to their residence, claims could be made against the association's insurance. However, if their drinking is light--one glass of wine, it should be harmless.
Association Events. Associations are allowed to serve alcohol at their events as long as they (i) are not selling the alcohol, (ii) not charging admission to attend, and (iii) not serving anyone under the age of 21.
No social host who furnishes alcoholic beverages to any person may be held legally accountable for damages suffered by that person, or for injury to the person or property of, or death of, any third person, resulting from the consumption of those beverages. (Civ. Code § 1714(c).)
Wine and cheese served at annual meetings or beer at association picnics rarely creates a problem. However, if an association serves hard liquor, the likelihood of an incident increases and the risk of litigation goes up, especially if participants drove to the event.
Charging Admission. If an association charges admission to an event where it is serving alcohol, it can be liable for injuries or deaths that may occur as a result of alcohol consumption. (Ennabe v. Manosa.) If money changes hands, whether charging admission, charging for drinks, or accepting "donations" for the event, the association's exposure to liability is significantly increased.
Obviously Intoxicated. Serving alcohol to an obviously intoxicated participant could result in a misdemeanor:
Every person who sells, furnishes, gives, or causes to be sold, furnished, or given away, any alcoholic beverage to any habitual or common drunkard or to any obviously intoxicated person is guilty of a misdemeanor. (Bus. & Prof. Code § 25602(a).)
Catering. If the association hires a bartender or caterer to serve food and alcohol, the board should make sure the person/company has insurance and the association is named as additional insured for the event. The board should also contact the association's insurance agent to find out if the amount of insurance is sufficient and if the association should purchase its own coverage for the event.
BYOB Events. Sometimes associations will hold events where members are allowed to "Bring Your Own Beverage." Even though the association is not serving alcohol, there continues to be exposure to liability if participants get drunk and injuries occur. Participants should be told they cannot bring liquor to the event, only beer or wine. Volunteers should be assigned to watch for anyone who is visibly drunk and gently guide them home. The board should make sure the association's insurance will cover any alcohol related injuries.
Liquor License. For information about liquor licenses, see California's website for Alcoholic Beverage Control.
Insurance. General liability policies do not cover liquor liability. Associations need to obtain "host liquor liability" insurance. This is a special liability form that covers individuals or organizations (not engaged in the business of distilling, selling or distributing alcoholic beverages) that sponsor or host events where liquor is served without charging for it. Special event insurance can be purchased through the associations insurance agent or through "The Event Helper" and "Quote Zebra."
Recommendations. If the association is sued, it may ultimately avoid liability but it will have to endure the litigation. It is better to avoid the problem altogether by limiting the alcohol to beer and wine and not allowing guests to consume too much. Whenever the association is serving alcohol at an event, the board should take some sensible precautions to minimize potential liability. Some of those precautions include:
- make the premises safe,
- invite members only, not the general public,
- do not charge admission,
- do not charge for the drinks,
- serve only beer and/or wine (and non-alcoholic drinks and food),
- establish a 2-drink limit (handout two drink tickets per attendee),
- do not serve anyone under the age of 21 (check IDs),
- do not serve a visibly intoxicated person,
- stop serving alcohol well in advance of the event's ending time,
- provide transportation home for those who may need it, and
- take out host liquor liability insurance for the event.
ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.