SC lawmakers are considering changes to liquor liability laws to ease rising insurance costs, which force bars to cut hours.
COLUMBIA, S.C. — South Carolina lawmakers are debating ways to address rising liquor liability insurance rates, which bars and restaurants say are becoming unaffordable.
Liquor liability insurance protects businesses that serve alcohol from legal and financial responsibility if an intoxicated customer causes harm or damage. Several bills in the House and Senate aim to make these policies more affordable as establishments report increasing rates and a shrinking number of providers.
A 2017 law requires businesses that serve alcohol past 5 p.m. to carry a $1 million liquor liability insurance policy. It can cover potential claims, such as medical bills or damages, if a customer leaves intoxicated and causes an accident. Some business owners say its rising rates and limited availability of coverage are forcing them to scale back operations.
Marty Dreesen, owner of Bar None in Columbia, said his bar has never had a liquor or minor violation in 30 years. Yet he can no longer find an insurer to cover him past 2 a.m., which means cutting employee hours.
“I have a total of 12 employees. At least half of them, it’s like taking a day of work away from them,” Dreesen said. “They all live paycheck to paycheck, or tips from one day to the next. Dropping their hours by 10 hours a week is going to affect them a lot.”
A legislative committee recently finished their work putting together an insurance study report, which is a compilation of recommendations from insurance groups, bars, and DUI victim advocates on their perspective on how to fix the state’s liquor liability issue. According to committee member Rep. Roger Kirby, D-Florence, the state has lost several insurance providers, leading to extreme premium increases.
“We’ve lost a number of companies here, and we’re seeing issues with property and casualty insurance and liability in general,” Kirby said. “But what really was the emphasis of this was the really extreme rates of premium increases for liquor liability, which impact all of our local bars, our VFWs, our restaurants.”
One recommendation of the Wholesale & Specialty Insurance Association is to change the state’s dram shop laws so that businesses are only liable if they knowingly serve an intoxicated person. Mothers Against Drunk Driving advocates for strengthening DUI laws instead, while the Insurance Services Office proposed capping the amount a bar can be held liable for in claims.
Dreesen said he supports a compromise that would ease the burden on businesses.
“We do a really good job. In 30 years, we’ve done an excellent job,” he said. “We didn’t do anything wrong, and I have to close earlier because of it.”
Bills in the House and Senate propose adjusting dram shop laws, changing how liability applies to bars, and staggering insurance rates for establishments that primarily serve food rather than alcohol.
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