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A grassroots movement led by small business owners and other community members across the Palmetto State is looking to undo damage they say was caused by the 2017 passage of new state liquor liability insurance laws. 

The law in question, S. 116, requires all bars, restaurants and venues that serve alcohol after 5 p.m. to carry a $1 million liability insurance policy. The measure was meant to protect victims of drunk driving and their families. But organizers with the grassroots SC Venue Crisis organization say the measure was missing key language to prevent it from being exploited to the detriment of business owners. 

“The insurance policy is typical in business — it’s normal to have coverage of that nature,” said organizer Asheton Reid, one of three organizers who is from Piedmont. “But when there’s no percentage of fault rules attached to that — even if you are just 1% at fault — you can be held responsible for $1 million.”

And in South Carolina, multiple establishments can be held 100% in a lawsuit — the real crux of the problem, Reid said. 

“Frivolous lawsuits in the wake of S. 116 have caused spikes in insurance rates,” she said. “We aren’t saying the victims don’t deserve anything, but this is making insurance companies leave the state. In 2017, we had at least 12 insurance providers, and now we’re down to three in just a few years.”

The average liability policy in the state, Reid said, skyrocketed from between $2,000 and $5,000 to up to $25,000. Some business owners said they struggled to find rates below $100,000. The higher costs are threatening to close dozens of small businesses across the state.  

“Most small businesses can’t afford that, and even those that can shouldn’t have to,” Reid said.

Potential avenues for change

Proposed legislation in the state House of Representatives and Senate is looking to remedy the situation, and advocates are also encouraging broader tort reform to make it more difficult for so-called “frivolous lawsuits” to cripple business owners. 

H. 4529, the S.C. Save Our Venues Act, was introduced in the S.C. House in June as the session was drawing to a close. It would prevent businesses from being held liable for injury, death or damage caused by an individual who became overly intoxicated as long as the business did not continue to sell alcohol to that individual beyond a reasonable level. 

The bill, introduced by S.C. Rep. Stewart Jones, R-Laurens, has 15 co-sponsors and was referred to the Judiciary Committee June 14. It likely won’t be considered until next year.

“We would love for [S.C. Gov. Henry] McMaster to call an emergency session to bring people back in on this issue before more businesses are forced to close,” Reid said. “Think of the unemployment this could cause — the trickle-down effect. The venue isn’t just the building; it’s the bar staff, the wait staff, distribution and food providers.”

Another Senate bill, the S.C. Justice Act, introduced by senior S.C. Sen. Thomas Alexander, R-Oconee, would amend several state laws governing percentage of fault and liability. It was referred to a Senate subcommittee in March chaired by S.C. Sen. Gerald Malloy, a Democratic sponsor of the current law. Malloy did not respond to requests for comment. 

“The tort reform is designed to make it harder for plaintiffs to sue,” Reid said. “It’s to make sure these lawsuits are fair, not frivolous. It can also decrease potential compensation after a suit has been won, placing caps on economic damages and attorney fees.”

Getting others involved 

The SC Venue Crisis movement has hosted several town hall meetings across the state to drum up support for the effort. The next town hall is set for 7 p.m. Aug. 14 at Frothy Beard Brewing Co. in Charleston. 

According to organizers, several Lowcountry legislators said that they were interested in attending, including S.C. Rep. J.A. Moore, D-S.C., and S.C. Sen. Sandy Senn, R-S.C., but they did not respond to requests for comment. 

“The town halls are really where we have the biggest chance of getting things done,” Reid said. “We’re telling everyone to, respectfully, because nothing gets done by being rude, contact their local legislators and let them know to support H. 4529 and S. 533.

“We have everyone’s best interest at heart,” she added. “It’s a legislative problem, and we want those who were voted in to make sure these small business owners and South Carolinians are taken care of and don’t have to worry about where their next paycheck is coming from.”

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