South Carolina restaurants and bars struggling with high insurance premiums may soon see relief following a compromise reached between the House and Senate on liquor liability reform. The agreement, announced earlier this week, addresses both liquor liability and joint and several liability.
The compromise, which has been approved by the House, concludes weeks of negotiations between the two legislative bodies. The Senate is expected to vote on the measure, a more limited version of their initial tort reform bill, during Wednesday’s session.
Lowering insurance rates for the hospitality industry was a stated priority at the beginning of the legislative session, with warnings that escalating premiums were forcing businesses across the state to close. However, negotiations between the House, which initially focused solely on liquor liability, and the Senate, which advocated for a broader tort reform package, proved lengthy.
The central issue was a 2017 law mandating that establishments serving alcohol after 5 p.m. carry insurance with a minimum total coverage of $1 million. While intended to ensure compensation for victims of alcohol-related incidents, many in the hospitality industry argued this led to insurance companies leaving the state and a subsequent rise in premiums.
The compromise maintains the $1 million minimum coverage but introduces a “risk mitigation program” allowing businesses to reduce their rates. For instance, establishments ceasing alcohol service by midnight could see their limit reduced by $250,000.
The bill also mandates alcohol training for all servers, and businesses serving alcohol on-site between midnight and 4 a.m. would be required to use a forensic ID verification system to qualify for a $100,000 reduction. Additionally, establishments where alcohol sales constitute less than 40% of their total revenue would also be eligible for a $100,000 reduction. Businesses would be required to maintain a minimum policy of $300,000.
The agreement also modifies how liability is determined and damages are awarded in civil lawsuits involving alcohol. Current state law allows for joint and several liability, potentially holding defendants more than 50% at fault responsible for the full amount of damages. Under the compromise, all parties contributing to a plaintiff’s injuries would be included on the jury form, a change intended to prevent unfair penalization for the actions of others.
The Senate has until the end of the legislative session at 5 p.m. Thursday to approve the measure and send it to the governor’s desk. If signed into law, most provisions of the bill would take effect on January 1, 2026.
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