South Carolina Lawmakers Propose Changes to Liquor Liability Laws

South Carolina Lawmakers Propose Changes to Liquor Liability Laws Amid Rising Insurance Costs for Local Bars and Restaurants

South Carolina state lawmakers are proposing changes to liquor liability laws in response to burgeoning insurance rates that are significantly impacting local bars and restaurants. With premiums for liquor liability insurance reportedly doubling for some establishments as their 2024 renewals approach, urgent action is being taken to alleviate the strain on the hospitality sector.

Leading the initiative is newly elected State Senator Ed Sutton, who is advocating for modifications to liability legislation that would adjust the criteria for determining liability. The current law, enacted in 2017, mandates that businesses serving alcohol after 5:00 p.m. must maintain a minimum liquor liability insurance policy of $1 million. This requirement has presented severe challenges for many small business owners and contributed to the closure of numerous local establishments.

The pressure on local bars and restaurants is evident, as several have shut their doors due to mounting insurance costs. One notable example is The Brew Cellar, which is set to close just two days after celebrating its 11th anniversary. As business owners grapple with increased premiums, issues of financial sustainability are brought to the forefront, with some owners torn between renewing their insurance policies or ceasing operations entirely.

Impact on Local Businesses

In the face of rising insurance costs, small business owners are emphasizing the urgent need for legislative reform to survive. According to industry experts, the significant increase in liability insurance rates has driven many insurance companies out of the South Carolina market, leaving remaining providers with little competition. As a result, rates have surged, placing an unsustainable financial burden on establishments that primarily serve alcohol.

Senator Sutton aims to strike a balance between providing necessary compensation for victims of alcohol-related incidents and preventing exorbitant premiums that threaten the viability of small businesses. However, victims’ advocates have expressed apprehension about potential alterations to the existing law, advocating for measures that ensure accountability and support for those affected by alcohol-related incidents.

Proposed Legislative Changes

Sutton’s proposed legislation, which he intends to present to the governor by May, could involve lowering the minimum liquor liability insurance requirements for businesses. While local businesses are hopeful for relief, the urgency of the situation means some may close their doors before any legislative changes are enacted.

Local industry stakeholders have highlighted the dire need for action to preserve Charleston’s culinary scene. Keith Benjamin from Uptown Hospitality Group has pointed out the potential long-term impact on the hospitality industry if high insurance costs remain unchecked. Many establishments feel pressured to transition towards chain restaurants, which can more effectively handle increased operating costs compared to smaller, independent businesses.

Legislative Negotiations and Future Steps

As lawmakers continue to negotiate potential reforms, discussions are focusing on providing clearer definitions of liability and exploring ways to lower premiums that have become prohibitive for alcohol-serving establishments. Some proposed amendments may also include requirements for bars to conduct staff training and implement operational measures designed to mitigate financial burdens.

Reflecting the growing concerns about rising insurance costs and their implications on small businesses, the National Federation of Independent Businesses has underscored the importance of legal clarity to help local establishments navigate the complications posed by inflated premiums and ongoing litigation challenges.

Additionally, Charleston Mayor William Cogswell has expressed support for legislative efforts intended to provide relief to local businesses, highlighting the cultural significance of the hospitality industry within the city. With the legislative session underway, the coming weeks will be crucial as lawmakers evaluate the extent of necessary changes to support South Carolina’s local economy.