SC bars argue law pitched as saving them from lofty insurance costs might actually hurt them
- SCCLR Newsletter
- Jan 21
- 7 min read
By: Sydney Dunlap
COLUMBIA — A new hope.
That’s what South Carolina bars and restaurants were looking for when an updated insurance law for their businesses passed in May after much debate and hand-wringing.
Many owners remember holding on to that hope in the beginning of the process.
Phill Blair, a co-owner at West Columbia beer garden WECO and former Main Street haunt The Whig, said he spent a lot of time keeping up with the many bill variations that were supposed to help businesses facing rapidly rising insurance premiums. He tried to talk to legislators and asked his customers to call theirs.
But when lawmakers finally came to an agreement in May, Blair said it didn’t feel like a victory for the hospitality industry.
“What finally passed in the end was just a joke, just as a small effort for them to save face and walk away,” he said. “It was sad.”
This bleak look at the impact of the new law is one many bars, restaurants, venues, and even advocates for victims of drunk drivers, agree on. Critics of the law argue that it not only doesn’t help with the main issue — high insurance costs — but also increases costs for compliance, stifles what could be a growing industry and still doesn’t address underlying issues with South Carolina’s driving-under-the-influence laws.
Blair said under current circumstances, while other cities grow, he sees Columbia’s as becoming a place of “just dying and death” as more bars and restaurants close.
And there’s evidence that something needs to change. Carolina Western Pub in the Vista, The Woody on Main Street and The Dales beer garden in the Lexington County hamlet of Springdale have all closed in the last nine months, citing, to varying degrees, liquor liability as one of the causes.
Critics of the new insurance law fear it’s a trend that’s still likely to continue.
The problem
In general, liquor liability insurance cost concerns spur from a 2017 law requiring South Carolina businesses selling alcohol past 5 p.m. to maintain at least $1 million in liquor liability coverage.
But the debate to fix the liability insurance industry goes back even further, with a sweeping compromise bill in 2005 that was later strictly interpreted by the S.C. Supreme Court to say that only defendants specifically named in lawsuits could be included among those who would need to pay damages.
Under the ruling, alcohol-related incidents were deemed exempt from South Carolina’s shared liability language. So alcohol-related personal injury and wrongful-death lawsuits could result in a bar who was found to only be partially responsible for an incident paying the entire verdict.
Further exacerbating the problem, some say, are the state’s lenient DUI laws, which allow for past convictions to not be taken into account, arguably incentivizing suspects to refuse a blood draw or Breathalyzer test to avoid punishment.
The confluence of these factors, critics argue, has had a predictable conclusion: South Carolina has created an inhospitable and risk-filled environment for alcohol-serving establishments that insurance companies are hesitant to touch.
Now, premium prices have increased to an unreasonable point for many business owners as insurance companies raise their prices or leave South Carolina’s liquor liability market entirely.
Doug Aylard, the owner of laid-back North Main bar and bottle shop Vino Garage and a board member for the South Carolina Bar and Tavern Association, said when he started in 2019 his liquor liability premium used to be just under $6,000 a year. Now it's $25,000 — and has been as high as $41,000.
When it was at a high, Aylard said he had to fire two people, one who was saving up for a house and another who was “just trying to pay rent.”
“Those were the hardest conversations I've ever had,” Aylard said. “I am firing you for no good reason.”
In theory, the state’s new law is supposed to help lower these costs, by reducing insurance coverage requirements for businesses who have ID scanners, who have their bartenders take alcohol training certification programs and where alcohol makes up less than 40 percent of sales.
It also reforms joint and several liability for businesses involved in alcohol-related lawsuits, so if a business is found to be less than 50 percent at fault they are required to pay only their share of damages.
In a separate amendment, juries also may now assign fault to individuals not named in a lawsuit, including DUI drivers, and if a verdict is returned against both the business and the
DUI driver, the permit holder’s liability is capped at 50 percent of actual damages.
The law also adds a “knowingly” standard for serving alcohol to intoxicated patrons.
But insurance agent Ben Hebel said the problem is that there didn’t seem to be clear communication with insurance carriers. So while, in theory, places will be eligible for lower rates, that’s far from the reality.
What the law doesn’t fix
South Carolina already has a very limited number of insurance carriers willing to offer insurance policies, with Hebel saying a typical bar or club has maybe four or five options that would entertain that type of risk and only one or two carriers that would actually offer terms.
And at this point, Hebel said there are no insurance carriers “running back into the state to offer coverage” and realistically, none will until they see how the law plays out in the court system, which could take years.
Instead of bringing relief, the new rules will actively increase costs for bars and restaurants, Columbia restaurateur Kristian Niemi argued.
Niemi, who owns cocktail-forward fine-dining establishments Black Rooster, Bourbon and Dragon Room, said the new certification requirements will mean paying employees for hours of training and testing as well as a $50 fee per certification.
Aylard, who employs a small staff of four including himself, said it will cost him $640 to get the certification. It will be much more for larger entities like Niemi’s and catering companies, who might see higher turnover and have more temporary employees.
Under the new law, servers and bartenders will also be required to show their certification if asked and employers must have every person’s certification records on hand — or risk being fined and eventually have their license revoked.
“You have to understand this, on a busy evening to go back into your office and have to pull someone's file so you can show them certification, it's just an absolute HR nightmare that they have unleashed,” Niemi said. “So they've given us more work to do now, and more fees, and none of it is really gonna prove that it's gonna reduce anybody's premiums.”
Niemi also sees the scanners as an issue. For their high cost — the cheapest options from IDscanner.com have a $645 price tag. And when it comes to safety — the devices collect personal information like the customer's full name and address, and have the ability to store that information.
Advocates for victims of DUI crashes have also expressed some discomfort with the changes.
Mother Against Drunk Driving South Carolina Director Steven Burritt said throughout the discussion of liquor liability, MADD was generally speaking against most of the reform that was suggested “not because we don't believe that there should be some sort of relief” but because the only solutions lawmakers seemed to want to focus on was reducing the payouts of crash victims.
“We think that's a terrible way to solve this issue, to put, essentially put it on the backs of the people, the only innocent people involved in these crashes,” Burritt said.
The impact
Multiple restaurants have already announced plans to shut down or close early, including two bars in Lancaster that will now close at 5 p.m. to avoid having to pay high liquor liability prices.
Benford Brewing owner Bryan O’Neal, who closed his bar at 5 p.m. after his insurance lapsed in September, said closing early means basically giving up on what has become a passion project and gathering place in his rural Lancaster community.
“If you live outside of the hub where people are at you're taking major risks. You're not doing it for yourself. You're trying to make something better for the community,” O’Neal said.
“You're willing to take everything that you got, you know, blood, sweat and tears, to make something for the people, to give them something that nobody else can give them. There's not going to be an Outback coming into Lancaster anytime soon,” O’Neal said, referencing the national chains that are often left when local businesses can no longer afford insurance.
At this point, Niemi said South Carolina is creating an environment where entrepreneurs can’t work “on” their business because they need to work “in” their business when they can’t afford another employee or a manager.
What’s next?
For restaurants, bars and venues, now is the beginning of a long waiting game as they wait to see if insurance carriers might lower prices or at least keep premiums the same.
Meanwhile, liquor liability hasn’t been indicated as a priority for the legislature, but a new DUI law that could remove loopholes for drunk driving is, and could be the beginning of a long domino effect for the hospitality industry.
“So ultimately, if we're effective in those things, and we hold people accountable to DUIs, and that means less future tragedies, hopefully we'll see less of these incidents that lead to these lawsuits,” Burritt said.
At a Jan. 15 Columbia networking event, S.C. Bar and Tavern Association Executive Director Chris Smith said the group plans to continue pushing for legislation changes that might help lower costs, like changing wording from “knowingly intoxicated” to “visibly intoxicated” and, ideally, getting rid of the $1 million policy requirement overall.
They’re also actively working to get sponsors for a budget proviso that could possibly suspend the new law because of unaffordability.
“Contact your state reps. Contact your state senators,” Smith said. “Hold the people running for governor, hold their feet to the fire on this issue, because they are the ones who are going to dictate policy in a lot of places.”
While bars and restaurants wait, they’re just hoping they can avoid announcing that they’re closing next.
“I feel bad for the people that are going to have to close their restaurants this year. You're talking about a lot of people who that's been their one and only dream was to open a bar, a restaurant or a venue or something like that,” Niemi said. “Little did they expect that serving any alcohol at their establishment was going to be the thing that killed their dream.”
