South Carolina’s Bars and Restaurants Face Insurance Crisis

News Summary

Bar and restaurant owners in South Carolina are alarmed by skyrocketing liquor liability insurance costs, forcing many to plead with lawmakers for action. The 2017 mandate of $1 million coverage after 5 p.m. has led to significant financial burdens, with some owners reporting losses in profits due to insurance expenses. As insurance options dwindle, representatives have recognized the challenge and proposed negotiating terms based on actual performance. The crisis has already resulted in closures of beloved establishments, raising concerns over the future of the hospitality industry.

South Carolina’s Bars and Restaurants Face Insurance Crisis

In the sunny state of South Carolina, local bar and restaurant owners are raising the alarm over skyrocketing costs of liquor liability insurance. As they gear up for the new legislative session, many are pleading with lawmakers to take action.

A Heavy Financial Burden

Kellen Monroe, who runs the popular Craft and Draft, has labeled liquor liability insurance as the second biggest expense his business faces, right after rent. This eye-popping claim highlights the financial squeeze that bar and restaurant owners are experiencing across the state.

The urgency of the situation can be traced back to a law passed in 2017, which mandated that businesses serving alcohol after 5 p.m. must carry a minimum of $1 million in liquor liability insurance. This law, while intended to protect patrons and establishments, has inadvertently driven insurance rates through the roof, making it increasingly difficult for small businesses to turn a profit.

Profit Erosion

Monroe mentioned that he finds himself forking over a staggering $100,000 from his profits just to keep his insurance coverage intact. For many other business owners, this financial drain has led to significant challenges, including hiring, growth, and even basic reinvestment into their establishments.

Fewer Options, Higher Rates

decrease in the number of insurance companies willing to offer liquor liability coverage. This limited market means fewer options for business owners, which ultimately results in inflated rates that many simply cannot afford.

Legislative Stake

Representative Micah Caskey has formally recognized the seriousness of the situation, stating that these soaring liability rates are creating particularly grim scenarios for the bar and restaurant sector. To tackle the issue, an insurance committee was formed during the offseason to brainstorm potential solutions aimed at lowering liquor liability costs.

Proposed Changes

Sweeping changes are being proposed, including the possibility of negotiating insurance terms based on a business’s actual performance, rather than applying a one-size-fits-all approach. Many owners argue this would alleviate some of the financial burdens they currently face.

For restaurateurs such as Steve Cook, the problem is all too real, as they’ve suffered significant hikes in insurance premiums—a staggering quadrupling over four years—which has noticeably stunted their ability to provide raises or grow their operations.

Casualties of the Crisis

The insurance crisis has led to the shuttering of several beloved establishments in the state. Noteworthy casualties include the renowned Blind Horse Saloon in Greenville, alongside other local haunts such as the Old Rock Quarry Winery and Velo Fellow. The closing down of these establishments is grim evidence of the damage being inflicted on the hospitality industry.

Concern for the Future

Owners are also voicing alarms regarding how rising insurance costs may deter potential new restaurants from opening in South Carolina. The state’s joint-and-several liability law exacerbates this issue, holding bars fully accountable for any damages linked to incidents involving their patrons. This means that even minor misfortunes can result in catastrophic financial repercussions for drinking establishments.

A Frustrating Legislative Journey

After the last legislative session ended without passing any reforms aimed at addressing the liquor liability insurance issue, business owners have grown increasingly frustrated. With the next General Assembly session just around the corner, they remain hopeful but wary of how quickly any real action may come.

Time is of the essence, as without timely legislative changes, the landscape could look even bleaker for South Carolina’s vibrant restaurant and bar scene. If things don’t turn around soon, many fear that even more closures are on the horizon, negatively impacting not just the restaurants, but also the suppliers and employees who depend on the thriving hospitality industry.