Liquor Liability Insurance Issues Still Affecting the Hospitality Industry in South Carolina
- SCCLR Newsletter
- Mar 10
- 3 min read
By: RipLey Simone
SPARTANBURG, S.C. (WSPA) — Lawmakers said changes to South Carolina’s liquor liability laws were aimed at lowering insurance costs, but bar owners said it’s done the opposite by increasing costs, making it harder for some to stay open.
Changes to the liquor liability laws went into effect January 1. Since then, businesses have been required to comply with a mandatory alcohol server training program. They also have an opportunity to reduce their insurance premiums.
Alcohol Server Training Program
According to South Carolina Department of Revenue, you must complete one of the approved training programs if you work 10+ hours a week serving alcohol or are a manager who oversees alcohol service.
There are penalties for failing to comply with the rules:
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$500/violation – For allowing an individual who has not completed an approved alcohol server training program to serve alcohol for on-premises consumption.
$100/violation – For failing to maintain or produce a copy of an alcohol server certificate.
Governor Henry McMaster signed a resolution to extend the alcohol server training deadline to May 1. The deadline was originally March 2, but businesses said they needed more time.
Reducing Insurance premiums
Under the law, any business that sells alcohol after 5 p.m., for on-premises consumption, must have a liquor or general liability insurance policy with an annual aggregate limit of $1 million.
Business may reduce their insurance coverage policy under the new risk-mitigation credit options. Meaning, owners would have to follow one or more of the conditions to reduce their insurance obligation:
Stop selling alcohol at midnight – $250,000 reduction
All employees complete alcohol server training – $100,000 reduction
Keep alcohol revenue less than 40% of total sales – $100,000 reduction
Use a digital ID scanner between 12:00 AM and 4:00 AM – $100,000 reduction
Be a non-profit or operate an event under a special event license – $500,000 reduction
Why are some businesses struggling?
Christopher Smith, Executive Director of the South Carolina Bar and Tavern Association, said it’s not a guarantee that businesses will actually receive these reductions because of a “disconnect between the Department of Insurance, the bill that passed, and the insurance companies.”
He described multiple scenarios where bar owners went to their insurance company for renewals and to let them know they qualify for a risk-mitigation reduction — just to be denied.
“People are saying, ‘I went to my insurance company and said, I’ve done X, Y, and Z as far as these mitigating factors’. And the insurance companies are basically telling them, ‘We don’t have to follow that, that’s not our policy, that’s state policy,'” Smith recounted.
“Unfortunately, these are [the insurance companies] policies. They’re not changing their policy just for the state of South Carolina, these are the policies they issue throughout the country.”
Smith said the South Carolina Bar and Tavern Association is requesting the SCDOR reconsider how these laws affect the entire hospitality industry, but especially small businesses who can’t afford to keep up with rising insurance policies.
“It affects mom and pops. You’re not seeing any of these corporate chains close, you’re seeing some place where you’ll go play trivia with a bunch of friends, the pool hall, the bowling alley, places like this are the ones directly affected,” Smith said. “And what’s going to end up happening if this continues, is that you’re going to have a chain on every corner, and there’s not going to be any kind of community gathering spots or places for people to go.”
Smith recommended reaching out to your state lawmakers if you are concerned about this issue.
