South Carolina Passes Liquor Liability Reform to Support Hospitality Industry

In the final hours of the legislative session, South Carolina lawmakers came together to pass a long-awaited liquor liability reform bill, delivering critical relief to the state’s hospitality industry. The measure, born from intense negotiations between the House and Senate, strikes a balance between accountability and support for restaurants, bars, and entertainment venues struggling with skyrocketing and unsustainable insurance costs.

A Compromise to Help Small Businesses

The new law, House Bill 3497, brings together elements from both the House’s original liquor liability proposal and the Senate’s broader tort reform approach. By blending key provisions from both chambers, lawmakers created a bill that promotes responsibility while relieving financial burdens on business owners.

Key Provisions of the Law

• Insurance Relief Through Risk Mitigation:
  While businesses serving alcohol must still carry a $1 million liability insurance policy, the new law introduces a tiered system allowing coverage reductions for those that take proactive safety measures. These include:

  • Ending alcohol service by midnight

  • Using digital ID scanners to verify age

  • Keeping alcohol sales under 40% of total revenue

  • Requiring staff to complete alcohol safety training

  If an establishment meets all criteria, it may reduce its required insurance coverage to as low as $350,000.

• Reform of Joint and Several Liability:
  Previously, establishments could be held fully liable in alcohol-related incidents, even if their share of the fault was minimal. The revised law ensures that a business must be found at least 50% responsible to be held fully liable, aligning the law more closely with actual fault in a given incident.

• Increased Oversight and Transparency:
  The legislation directs the South Carolina Department of Insurance to publish annual data on liquor liability insurance rates, claim trends, and policy availability, helping lawmakers and the public better understand and address ongoing industry challenges.

A Win for the Hospitality Industry

Restaurants and entertainment venues across the state have faced unsustainable increases in insurance costs, with many seeing premiums multiply tenfold in recent years. These financial pressures have forced some businesses to close or cut back on operations. The hope is that the new law will stabilize the insurance market and give small business owners a path forward without sacrificing safety.

What’s Next

Governor Henry McMaster is expected to sign the bill into law. Most provisions will take effect on January 1, 2026, giving businesses time to adjust and take advantage of the risk-reduction measures. The bill is being heralded by many in the industry as a crucial step toward sustainability, fairness, and economic resilience.

South Carolina’s hospitality industry is a vital part of the state’s economy and culture. With this reform, lawmakers have taken a step to ensure these businesses can continue to thrive while maintaining public safety.