On July 1^, 2017, South Carolina passed a law requiring businesses with certain alcohol permits to prove that they have liquor liability insurance coverage in place with at least $1 million coverage in order to renew their alcohol permit.  The permits that fall under this new rule are those that allow on premises drinking after 5 pm.  If you hold one of these permits, then you will need to prove that you have liquor liability insurance in place in order to renew your permit.

This new ruling seems to be a reaction to an event that happened in South Carolina. A Dillon police officer was paralyzed and brain damaged after being hit by a drunk driver.  The driver had no insurance coverage and the bar that served this driver carried no liquor liability insurance.  Neither of these two parties had the assets needed to cover the losses to this police officer and his family.  As a result, the city of Dillon found itself next in line for the liability expenses of this accident.  This soon proved too high a price even for the town of Dillon to absorb.  This case inspired the SC legislature to respond with a new law that requires business that serve alcohol after 5 pm for consumption on their premises to have $1,000,000 of liquor liability insurance in place before they can renew their alcohol permit.

What does this mean for you? If you are a resident of SC, then over time as more bars and restaurants are forced to purchase liquor liability insurance, you should be less likely to suffer an uncompensated loss if you are hit by an intoxicated driver.  If you are a bar or restaurant owner, then this is a wake up call to double check your coverages to be sure that you have this protection in place.  If not, you can technically wait until your alcohol permit expires before you will be forced to purchase this coverage.  But in reality, going a day without it seems like too much risk.  This is the kind of loss that can absolutely run you out of business should it happen to you.  Liability risks are unpredictable, both in timing and scope and insurance is the only sure way to provide your company with some protection.

How does it work?  Liquor liability insurance is rated based on your gross sales of alcohol.  Ultimately, most policies charge a stated rate per $1000 of gross alcohol sales.  We have seen rates as low as $2 per $1000 of sales and as high as $25 per $1000 of sales.  The reasons for this wide discrepancy in rates are really based on the different kinds of situations in which those businesses with on premises alcohol consumption find themselves.  For instance, if your ratio of alcohol sales to food sales is relatively low, then you can expect a much lower liquor liability insurance rate.  If you are a bar that closes earlier, your rates will be lower than on that stays open later.  Live entertainment can often contribute to a higher rate.  If you would like to learn more about exactly how much this coverage will cost your restaurant or bar, please feel free to call us at 877-687-7557 or visit us online at www.scliquorinsurance.com.