Locally-owned restaurants, bars, and entertainment spots across SC are closing, citing rising liquor liability insurance premiums.

It’s a complex issue, and we’re trying to help make it easier to understand.

A 2017 law

Let’s go back to 2017 when a new state law required businesses serving alcohol after 5 p.m. to carry at least $1 million in liability insurance.

“This bill will, quite literally, be a lifesaver for many families,” said SC Association for Justice President Alex Cash when it was signed by Governor Henry McMaster seven years ago.

While the law was designed to protect victims of alcohol-related incidents, it has led to financial strain on small businesses and driven insurers out of the state, causing rates to spike.

Local businesses were hit hard

Liquor liability premiums have skyrocketed across the state:

Local 616, a downtown bar that has served the Charleston community for 12 years, is closing on Wednesday, Feb. 12. Owner Dwyane Mitchell said the decision comes as the cost to conduct business continues to rise, mentioning insurance rates and inflation. (The Post and Courier + Holy City Sinner)
The Brew Cellar in Park Circle will permanently close on Monday, Feb. 17, or sooner if inventory runs out, citing rising costs of SC’s mandatory liability insurance. For 11 years, this local spot has been a go-to for sipping or grabbing drinks to-go. Read the full statement.
Holy City Magic, a spot known for its magic and comedy, closed last year. The theater announced its final show was Saturday, Dec. 21. The spot says the moves came after updates to the state’s liquor liability insurance requirements.
The Lowcountry’s Summerville VFW saw its rate jump from $9,500 to $69,000, forcing its closure.

Are you a local business owner dealing with rising liquor liability insurance rates? Let us know about your experience.

SC’s insurance market

A SC Department of Insurance report reveals liquor liability insurance is unprofitable for insurers, leading to fewer carriers + leaving small businesses with rising premiums and limited options.

Next steps

The SC Senate is set to discuss the topic on Thursday, Feb 6.

How will SC protect its local businesses while maintaining safety and responsibility? In the best-case scenario, lawmakers could reach a compromise. However, seeing the issue delayed until May of 2026 would be the worst-case scenario for businesses.