Some insurance reprieve to come to bar and restaurant owners Jan. 1. Will it be enough?
- SCCLR Newsletter
- Dec 31, 2025
- 3 min read
By: Anna Wilder
COLUMBIA — Starting Jan. 1, South Carolina will implement a new insurance law for restaurants and bars, a move some lawmakers hope will bring relief to an industry battered by years of rising costs and legal uncertainty. Not all impacted by the price hikes are convinced the changes will help as intended.
Lawmakers reached a last-minute agreement in May to address alcohol-related civil liability, a long-standing and contentious issue for the state’s restaurant and bar industry. The debate consumed hours of floor time and emerged as a top Republican priority during the 2025 legislative session.
The bill came after Republicans pushed hard for broad legal reform with a goal to fix an area in state law that allowed someone to be held fully responsible for damages even if they were only partially at fault.
House Republicans initially favored a targeted approach focused on liquor liability and soaring insurance rates. Senate Republicans pushed for a broader tort reform package that also addressed medical malpractice, construction defects and other areas of insurance law.
Ultimately, lawmakers approved the House-backed approach designed to ease the recent surge in liquor liability insurance costs that have strained, and in some cases shuttered, bars and restaurants across the state.
The new law will reduce insurance coverage requirements for venues where alcohol makes up less than 40 percent of sales.
It also limits liability for businesses found to be less than 50 percent at fault, requiring them to pay only their share of damages. Juries may now assign fault to individuals not named in a lawsuit, including DUI drivers, and the law adds a “knowingly” standard for serving alcohol to intoxicated patrons.
The law still requires businesses that serve alcohol after 5 p.m. to carry at least $1 million in liquor liability coverage.
Before the changes, alcohol-related personal injury and wrongful-death lawsuits could leave a business on the hook for the full verdict even if it played a limited role in the incident.
It pushed numerous establishments out of business, they contend.
Lawmakers say the new law is intended to soften that risk. Beginning in 2026, all servers and managers must complete state-approved alcohol training, and establishments can lower their insurance requirements by adopting risk-reduction measures such as ending alcohol service by midnight, completing training or using ID-scanning technology.
After the bill passed in May, Senate Majority Leader Shane Massey told reporters the legislation did not go as far as he wanted, but was better than the previous system.
“I don't think it's going to do a whole lot,” Massey said recently. “I think we're going to have to come back and address those issues but we are where we are, and I think we're going to need to let that play out for a little bit and see what kind of an effect it has on the alcohol insurance marketplace.”
Massey said he had heard from a few owners concerned the bill wouldn’t fully solve their problems. While he is open to further changes, he stressed lawmakers need to see the initial impact before taking additional action.
“I doubt that's something that you're going to be able to address off the bat, because people are going to want to see what happens,” he said.
House Republicans did not include liquor liability specifics in their 2026 legislative priorities, though insurance reform in general was highlighted. House Speaker Murrell Smith said the session would focus on broader insurance issues.
Smith added that he had heard interest from some House Republicans to begin moving on a broader tort reform package when the 2026 legislative session began.
Not all lawmakers are optimistic about the new law. Rep. Jay Kilmartin, R-Lexington, who owns two restaurants and is a member of the Freedom Caucus, said the industry has faced years of rising insurance costs.
“I’ve been a franchise for a long time and I've had to have more coverage than was really required by the state, and my rates were very, very reasonable until the last three years,” Kilmartin said.
For South Carolina restaurants and bars, getting insurance companies to return to the state is still a major hurdle. Kilmartin said he hopes the legislature will revisit S. 244, the broader insurance bill from the 2025 session aimed at further reforming insurance policies for the industry.
“The insurance people I've spoken to are not very hopeful, because it took years and years to get to the point where they wouldn't write policies in South Carolina. So I don't think the industry comes running back to South Carolina immediately,” he said.
Kilmartin added that without quicker action, many local businesses may not survive.
“We could see a little bit of relief this year, and it could get better as the years go on, but I know a lot of business owners that won't be able to survive unless it happens quickly.”
