South Carolina Lawmakers Tackle Liquor Liability Insurance Crisis

News Summary

South Carolina lawmakers are pushing to amend liquor liability laws due to soaring insurance costs crippling local bars and restaurants. Small business owners report significant premium increases, with some forced to close. The proposed changes aim to balance the needs of business owners with the safety of patrons. However, victim advocacy groups warn that altering liability laws could reduce protections for those harmed by alcohol-related incidents. Urgent legislative action is being sought to address these issues before more establishments close and the local hospitality industry is jeopardized.

South Carolina lawmakers are advancing proposals to amend liquor liability laws in response to soaring insurance costs affecting local bars and restaurants. Many small business owners have reported that their insurance premiums have doubled or even tripled as they prepare for renewals in 2024, compelling lawmakers to take action to alleviate the financial strain on these establishments.

Newly elected State Senator Ed Sutton is at the forefront of this legislative effort, advocating for changes that would modify how liquor liability is assessed. In 2017, South Carolina enacted a law mandating that establishments serving alcohol after 5 p.m. maintain a minimum insurance policy of $1 million. This requirement has led to increasing financial burdens on small business owners, many of whom are struggling to keep their doors open.

The financial challenge has become so severe that some businesses, such as The Brew Cellar, have had to shut down due to unsustainable costs associated with liquor liability insurance. Bar owners, including individuals like Zach Dennis, express deep concern about the difficult decisions they now face—choosing between renewing a costly insurance policy or closing their businesses altogether.

Senator Sutton’s proposed amendments aim to create a balance that enables business owners to remain operational while ensuring that victims of alcohol-related incidents can still receive appropriate compensation. He contends that the existing system disproportionately impacts small businesses, leading to a scenario where they suffer from conflicting interests between insurance companies and the legal system.

However, these proposed changes have drawn criticism from victim advocacy groups, who argue that amending the liability laws could weaken protections for individuals harmed in incidents involving alcohol. They express concern that reducing liability for bars and restaurants could result in less accountability for establishments serving alcohol and diminish the recourse available to victims.

The urgency of the situation is highlighted by the potential crisis facing Charleston’s vibrant hospitality industry, which contributes approximately $13 billion annually to the local economy. Without prompt legislative changes, many local establishments could face permanent closure, threatening the livelihoods of their owners and employees while altering the landscape of the city’s dining and nightlife scene.

Insurers reported policy increases ranging from 100% to 1,000% in recent years, creating a daunting environment for small businesses, many of which are already taxed by various economic pressures. Lawmakers are eager to finalize the proposed changes by May, emphasizing the time-sensitive nature of this legislative effort amid ongoing challenges for local business owners.

Moreover, there is a growing concern that if the insurance crisis remains unaddressed, large chain restaurants might overshadow small local establishments, ultimately diminishing the unique character of the area. To tackle these challenges, the Responsible Hospitality Reform Alliance has been formed, advocating for legislative reforms to lower liquor liability rates while enhancing public safety and improving alcohol server training.

Currently, two significant bills are being debated in the South Carolina legislature. One bill focuses on general tort reform, while the other specifically seeks to revise “dram shop” laws, which govern liability for businesses serving alcohol. Under current laws, establishments can be held fully liable for incidents involving alcohol consumption, even if they were only partially responsible. This condition has led to a dramatic rise in insurance premiums for many businesses.

As discussions about these proposed changes continue, local business owners and stakeholders await the outcome of legislative sessions, with hopes that solutions can be found to assist those grappling with ever-increasing insurance costs, ensuring both the sustainability of small businesses and the protection of victims.

Deeper Dive: News & Info About This Topic

• Charleston Business: SC Liquor Liability Insurance Reform 2024
• ABC News 4: Business Forced to Close Due to SC Liquor Liability Law
• Charleston City Paper: Liquor Liability Crisis Divides Lawmakers
• Post and Courier: Liquor Liability Insurance Legislation
• Wikipedia: Liquor Liability Law