South Carolina Bars Cut Hours as Lawmakers Debate Liquor Liability Insurance Reform

South Carolina bars and restaurants face a financial squeeze as soaring liquor liability insurance costs force some to cut back on late-night operations.

Published on February 3, 2025

liquor liability insurance
Male bartender with tattoos pours an alcohol cocktail adding cold whiskey in glass

South Carolina bars and restaurants face a financial squeeze as soaring liquor liability insurance costs force some to cut back on late-night operations. The state legislature is now considering changes to dram shop laws to ease the burden on business owners struggling to keep their doors open.

Rising Insurance Costs Threaten Late-Night Hospitality Industry

Liquor liability insurance is a requirement for any South Carolina establishment serving alcohol past 5 p.m., providing coverage if an intoxicated patron causes harm or damage after leaving the premises. However, a dwindling number of insurers in the state has led to skyrocketing premiums, leaving some bars unable to afford coverage or find a provider willing to insure them past certain hours.

Marty Dreesen, owner of Bar None in Columbia, has run his establishment for three decades without a single liquor or minor violation. Yet, despite his spotless record, he can no longer secure insurance for operating past 2 a.m. The result? Fewer shifts for employees who depend on late-night hours to make ends meet.

“I have a total of 12 employees. At least half of them, it’s like taking a day of work away from them,” Dreesen said. “They all live paycheck to paycheck, or tips from one day to the next. Dropping their hours by 10 hours a week is going to affect them a lot.”

Legislative Proposals Aim to Provide Relief

A legislative committee recently completed an insurance study report compiling recommendations from industry stakeholders, including insurance groups, bar owners, and DUI victim advocates. According to committee member Rep. Roger Kirby (D-Florence), South Carolina’s shrinking pool of insurance providers has triggered extreme premium increases, impacting not only bars and restaurants but also VFW halls and other local establishments.

“We’ve lost a number of companies here, and we’re seeing issues with property and casualty insurance and liability in general,” Kirby explained. “But what really was the emphasis of this was the really extreme rates of premium increases for liquor liability.”

Among the proposals under consideration:

  • Adjusting dram shop laws to hold businesses liable only if they knowingly serve an intoxicated person.
  • Capping the financial liability that bars face in liquor-related claims.
  • Strengthening DUI laws instead of increasing liability requirements for businesses.
  • Staggering insurance rates for establishments that primarily serve food rather than alcohol.

Finding a Middle Ground

While lawmakers weigh these proposals, business owners like Dreesen are advocating for a balanced approach that both supports responsible alcohol service and prevents small businesses from closing their doors due to unaffordable insurance.

“We do a really good job. In 30 years, we’ve done an excellent job,” Dreesen said. “We didn’t do anything wrong, and I have to close earlier because of it.”

As legislative discussions continue, South Carolina’s bar and restaurant industry is left in limbo, waiting to see if lawmakers will take action to provide relief before more businesses are forced to cut hours—or shut down entirely.

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