Zoe Smith
Associate Editor
Loyola University Chicago School of Law, JD 2026
For many Americans, turning twenty-one means the end of alcohol regulations. However, for the people of South Carolina, that is not always the case. Hosting a Sunday brunch and need last-minute liquor supplies? Stores are closed. Need to make a quick stop at the liquor store for your weekend festivities after work? If it is after 7 p.m. that is not possible. South Carolina’s archaic alcohol regulations have frequently been a topic of concern for businesses, individuals, and the government. Many believe that the Alcoholic Beverage Control Act, the source for these laws, should be amended to mirror other states with less stringent laws regarding the sale of alcohol. Even more recently, the insurance liabilities imposed on sellers of alcohol in South Carolina have increased, leading to the closure of many businesses. If these regulations do not change in the coming years, the South Carolina legislature is likely to see increasing violations of these regulations or an increase in the number of small businesses closing.
An overview of the Alcoholic Beverage Control Act
The Alcoholic Beverage Control Act is found in the South Carolina Code of Laws, Title 61, Chapter 6. The Act covers a variety of restrictions on purchasing, possessing, or consuming alcohol in the State of South Carolina. Article 3 of the Code covers the regulation of retailers, wholesalers, and manufacturers. Restrictions under this article include a ban on issuing licenses to businesses located within 300 feet of any school, church, or playground within city limits, and within 500 feet outside city limits. Additional restrictions include mandatory licensing for food service establishments and limits on retail alcohol sales between 7:00 p.m. and 9:00 a.m.
Liquor liability insurance in South Carolina
If the Alcoholic Beverage Control Act does not have enough restrictions already, Chapter 2 of the South Carolina Code, Section 145 further requires that businesses in South Carolina maintain a liquor liability insurance policy protecting the establishments from harm caused by an intoxicated person who was served alcohol at the business. Many states have similar laws regarding liquor liability insurance. However, what makes South Carolina different from these other states is that businesses serving alcohol after 5:00 p.m. must maintain at least $1 million in liquor liability coverage. The law concerning the coverage was passed in 2017. Why must these businesses maintain such a high coverage? Some believe it is the combination of South Carolina’s lenient DUI laws and a bill including alcohol-related incidents in joint and several liability lawsuits, allowing a partially liable defendant to be held liable for the full amount of damages.
In most states, liquor liability insurance costs about $55 a month, coming out to around $660 a year. In South Carolina, since the passing of the law in 2017, many businesses have reported a significant increase in these insurance costs. One bar owner reported paying $8,800 in 2021, but $31,000 in 2023. Another bar, experiencing an increase in liquor liability costs from a mere $5,000 to $60,000 in the span of three years. In Charleston, South Carolina, in the last two months almost a dozen local bars and restaurants have closed their doors for a variety of reasons, but a significant one being the rising liquor insurance rates.
Closing remarks and arguments
South Carolina, like many states, wishes to promote small businesses in many ways. However, the liquor liability costs harm these businesses, making some of them unable to recover from the rising costs. There is no evidence of talks to decrease these rates in the coming years. As the costs continue to rise, the businesses will have to rely on their consumers to help keep their doors open. For some, the rising costs will mean the end of their livelihoods. In this industry, it is important to remember that not only the owners are affected, but their employees as well. One article points this out, and notes that with the closing of these businesses, towns and cities will lose tax revenue and tourism dollars.
Some bars argue that if they only serve a person one drink, they should not be held liable for 100% of the damages if that person then goes and has several more drinks at another bar and many bars are advocating for laws that support this. Something everyone agrees on is that innocent victims of an intoxicated person deserve justice, though those measures shouldn’t hurt responsible businesses. South Carolina is the worst state in the nation for fatal drunk driving crashes. Instead of punishing small businesses, the legislature should look at ways to restrict and punish drunk drivers instead. They should consider making their extremely lenient DUI laws much stricter, shifting the costs from small businesses to the people committing the crime.