If you do have an open bar its very very important you take our the proper insurance, even if the venue says they have coverage, your better to pay the $100 from the local insurance company and get more insurance, just for that reason.
That being said, I have italien friends who wouldnt dream of not having an open bar, in there case, there families expect it, and there for their parents have footed the bill, it wasnt the bride and grooms money being used.
I personally am not willing to fund my guests alcohol, I am however offering a bottle of red and white white per table, and we will have extra wine if people are interested, we also will have a champagne toast, the wine is to complement the dinner, not to over drink, and chapagne is for guests to toast, if people decide they want to drink a beer, highball, or some other funky drink, its on their dime.
We will however most likely offer to buy family a drink , and me and my fiance will most likely offer to buy friends a drink (especially our bridal party) but we arent advertising this, rather, Ill order an extra drink and offer it to someone im talking to, or if I notice my uncle is having beer, I may bring him one over and chit chat with him for a bit.
In reality, if you make the alcohol a smaller part of your wedding, your wedding is going to go over much smoother then if your advertising that the drinks are "on the house".