Skyrocketing liquor liability insurance rates in South Carolina are threatening to shutter local bars and entertainment venues, but advocates say the impact could have a massive ripple effect that most are missing.
SC Venue Crisis, a grassroots movement started in April by Upstate small business owners and advocates Kynn Tribble, Asheton Reid and Sheila Merck, held a town hall meeting Monday night at Frothy Beard Brewing Company in West Ashley to raise awareness of the problem. Dozens turned out, including several local business owners who had a personal stake in the movement.
The 2017 passage of Senate Bill 116 requires all bars, restaurants and venues that serve alcohol after 5 p.m. to carry a $1 million liability insurance policy. But critics say the bill is missing key language to prevent it from being exploited to the detriment of business owners, leaving them vulnerable to sky-high lawsuits and driving up rates.
“The insurance policy is typical in business — it’s normal to have coverage of that nature,” Reid told the Charleston City Paper. “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. … These frivolous lawsuits in the wake of S. 116 have caused spikes in insurance rates. … In 2017, we had at least 12 insurance providers, and now we’re down to three in just a few years.”
And the few providers that are left have hiked their prices to keep up with the higher costs. The average liability policy in the state, Reid said, skyrocketed from between $2,000 and $5,000 to up to $25,000. Tribble, who owns a bar in the Upstate, said his policy jumped to $40,000 after the bill passed, and within a few months of shopping for a different provider, it had soared to $100,000.
“They said the only way around it was to make noise and change the laws, so that’s what we started trying to do, and it’s caught on,” Tribble said. “I didn’t realize how many people were in the same shoes as we were, and some of the numbers they’re telling me [in Charleston] are astronomical. Numbers I’ve heard down here are $280,000, $400,000 and one business with multiple locations is paying over $500,000.”
A bigger impact than expected
South Carolina netted $29 billion in tourism last year, according to reports. State leaders touted the record-setting income as an 11% increase over the year before, signaling a return to a healthy economy after the end of the pandemic.
“But tourism would take a massive hit if all these bars started shutting down,” Tribble said. “A lot of the charm of places like Charleston are these old dives. You start losing those kinds of places, and you start losing people, and if you think that’s not going to affect everybody, it is. These folks aren’t just spending money at the bars. They’re getting hotel rooms; they’re eating at restaurants; they’re putting gas in their cars. It’s all connected.”
And it affects more than just businesses, too. American Legion, a national veteran services organization, operates bars to generate money to fund community service programs in their areas. Ivan Fannin, sergeant at arms for American Legion Post 147 on James Island, said the insurance rules have forced the organization to raise bar prices by 25%.
“Our costs have been gradually going up, but this latest jump this year is just mind-blowing,” Fannin said. “You have people who are on fixed incomes, veterans and retired folks coming to us, and this 25% hike we had to implement — that’s a lot. There’s only so much juice you can squeeze out of a lemon.
“Our organization is a sanctuary for other veterans — it’s not for profit,” he added. “It’s a home away from home, and the bar is just a way to keep the doors open. We provide so much more to our community: rides for veterans to medical appointments, we sponsor a Little League team, we pay for medical equipment, sponsorships and more. This one piece of legislation is threatening all of that. We opened our doors in 1950, and this could be a death blow.”
Advocates remain hopeful
Monday night’s town hall was the 22nd held by the group, Reid said, and the turnout keeps getting better.
“I came down to Charleston in July, and only two people showed up. Four showed up to another,” Tribble said. “That was really disheartening, but that’s why we came back, and boom, the turnout tonight was great.
“And the biggest thing is that the representatives are starting to show up now,” he added. “None were here tonight, but they have shown up at several meetings, and they are saying they want to change things — to fix this.”
Proposed legislation in the state House of Representatives and Senate looks to address advocates’ concerns, such as H. 4529, introduced in the S.C. House in June, and the S.C. Justice Act, a Senate bill that was referred to a Senate subcommittee in March. But as the state’s legislative session ended in May, neither bill will likely be considered until next year.
Neither of the bills’ sponsors, S.C. Rep. Stewart Jones, R-Laurens, in the House nor S.C. Sen. Thomas Alexander, R-Oconee, responded to requests for comment.
“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.”
And while an emergency session is unlikely, Tribble said his team is continuing to encourage people to reach out to their legislators anyway.
“We’ve talked to so many people and seen so many faces,” he said. “I did not expect this, but that’s how it started growing. I have to see it through, because there are a lot of people counting on something happening. … People say, ‘Oh this won’t happen,’ but we’ve already seen things happen that they say wouldn’t happen.
“The movement is growing, and the more legislators are contacted, the more they will get on board,” he added. “Even if they’re not 100% behind it, they’re there to represent their people. If the people are hounding them about it, then that’s obviously what the people want.”
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