A guest becomes drunk at your house
A friend leaves your Super Bowl party, hops into his car and promptly plows into another vehicle. Everybody in the other car winds up in a hospital, and you get sued for serving alcohol to your friend.
There's plenty of variation in state laws, regional court cases and insurer policies, but in general the liability portion of your homeowners insurance can help pay your defense and any damages awarded, up to the limits of your policy.
Since many homeowners policies limit liability protection to $300,000 or so, you'd be smart to investigate getting at least a $1 million personal liability or umbrella policy if you're a homeowner. You can get more if you need more.
Also, your coverage may depend on your not doing something egregiously stupid, like continuing to serve someone who was already drunk or serving a minor.
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