Yes, unfortunately, the insurance thing is very real.
And, even worse, if your bathroom is not ADA compliant, you can be sued.
I live in a small community where some business owners were literally put out of business because there is a local attorney who was sending people in to make a list of all the ADA infractions and then suing the businesses. Many of these businesses were "mom and pop" shops who couldn't afford the fines or the restoration to make their restrooms handicap accessible.
So....the only way for businesses to protect themselves is to openly post signs that say, NO PUBLIC RESTROOMS.
Now, restaurants, by virtue of serving food, have to have public restrooms. Other businesses are not required to do so.
It does make it hard when you've got little kids. I always hate it when we have people come in to apply for jobs (we can have 20+ per week) and we have to tell them we don't have public restrooms. We have several prominently displayed signs, but they still ask. Our location also lends itself to people just coming in off the street and asking for a restroom.
We're a professional business office in an older building. The place would have to be literally levelled and rebuilt to provide compliant public restrooms.
I know it's a cruddy situation and I'm sorry you had to go through that with your little one, but some businesses are very afraid of not adhering to the no public restrooms policy.
Don't take it personally.
Best wishes.
*********Sorry! Just saw Cheryl B's response. I think we may be talking about the same attorney. He has made his way up and down the state of California. He has an office here and he hit this place like a tidal wave.