South Carolina Lawmakers Propose Changes to Liquor Liability Laws

News Summary

South Carolina lawmakers are addressing skyrocketing liquor liability insurance costs that have forced many small businesses to close. Senator Ed Sutton is sponsoring a bill to amend the state’s liquor liability regulations, aiming to balance reduced insurance premiums for small businesses with adequate compensation for victims of alcohol-related incidents. The proposed legislation seeks to lower the minimum insurance requirement while ensuring necessary protections for victims, addressing concerns that current laws threaten local businesses and the state’s vibrant culinary scene.

South Carolina lawmakers are proposing significant changes to liquor liability laws in response to soaring insurance costs that have driven numerous local businesses, such as restaurants and bars, to shutter their doors. The legislative initiative comes amid reports of some bar and restaurant owners experiencing insurance premium increases of up to 100% during renewals in 2024.

Newly elected State Senator Ed Sutton is championing a bill aimed at amending the state’s liquor liability regulations. Under current law, enacted in 2017, establishments serving alcohol after 5:00 p.m. are required to maintain a minimum liability insurance policy of $1 million. This mandate has created substantial challenges for small business operators, resulting in several insurance companies exiting the South Carolina market while others substantially raised their rates.

Among the recent casualties of these rising costs is The Brew Cellar, which is set to close shortly after marking its 11th anniversary. This closure exemplifies the difficult choices business owners face regarding whether to renew their insurance or cease operations altogether.

Senator Sutton’s proposed legislation seeks to strike a balance between reducing insurance premiums for small businesses and ensuring that victims of alcohol-related incidents are still adequately compensated. However, he faces opposition from advocates for victims, who argue that changes to the current law could undermine protections for those affected by intoxicated individuals. The bill aims to lower the minimum insurance requirement while still providing essential safeguards for victims.

Many local business owners claim that the financial burden of liquor insurance is unsustainable, and fear that without modifications to the law, the vibrant culinary scene of Charleston could suffer irreparably. This area is not just a hub for dining but also a critical component of the local economy, with Charleston’s tourism industry valued at approximately $13 billion.

Zach Dennis, a bar owner and insurance agent, highlights that some of his clients have been forced to close due to the exorbitant costs associated with alcohol liability insurance. There is growing concern that if the existing laws remain unchanged, small businesses may be replaced by larger chain establishments that can more easily absorb such costs.

In response to these challenges, Sutton aims to have actionable legislation ready for the governor’s consideration by May. However, with the clock ticking, it may be too late for businesses that have already been impacted by the current liability landscape.

The South Carolina House and Senate have reportedly reached a consensus on legislation intended to lessen the liability faced by business owners in alcohol-related incidents. The proposed amendments suggest that businesses could only be responsible for a percentage of the damages linked to incidents involving alcohol. This change could provide crucial relief to distressed establishments struggling to remain afloat amid current market pressures.

Insurance premiums for liquor liability coverage have skyrocketed, with documented increases ranging from 100% to as high as 1,000% in extreme cases. Mayor William Cogswell has voiced support for expediting the review of liquor liability regulations aimed at protecting small businesses facing these financial injustices.

The new regulations are expected to impose stringent training requirements for staff involved in alcohol service, aimed at minimizing the risks associated with such operations. Additionally, insurers will be obligated to provide information about their practices; however, they are not required to offer liquor liability coverage, raising concerns about future competition within the insurance market.

Some stakeholders express skepticism regarding the proposed reforms, fearing that more extensive legal and legislative efforts will be necessary to effectively address the underlying issues causing high insurance premiums. Furthermore, advocates are calling for a broader approach to tackle tort reform and DUI law adjustments, suggesting these changes are crucial to alleviating the root causes of costly insurance challenges for businesses.

Deeper Dive: News & Info About This Topic

• Charleston Business: SC Liquor Liability Insurance Reform
• Post and Courier: Liquor Liability in South Carolina
• ABC News 4: Business Forced to Close Due to SC Liquor Liability Law
• Insurance Business: SC Senate Passes Liquor Liability Reform Bill
• Wikipedia: Liquor Law