By: Senator Michael Johnson
In recent months, each time that I talk with restaurant and bar owners I hear a common refrain, “why are our insurance premiums going up so quickly?” Throughout South Carolina, insurance companies are substantially increasing liquor liability insurance premiums for restaurant and bars. I sit on a Judiciary Subcommittee which is studying this issue to determine why this is happening, and what can be done about it.
One reaction has been to pass “tort reform.” Advocates of this plan argue that by enacting these changes more insurance providers will write business in this state and premiums will go down. The problem is that based on past tort reform measures, this approach would likely have little to no real impact because past changes have not led to lowering of insurance premiums – which is what restaurant and bar owners want.
For example, back in 2005 the legislature attempted to pass tort reform as it relates to medical malpractice insurance. The promise was that premiums would go down. Instead, based on information provided to our committee by the Department of Insurance, rates plateaued for a few years before beginning to rise again. Rather than pass meaningless reform, I would actually like to fix this issue.
So, what is the problem with premiums in South Carolina? Last week, the Director of the Department of Insurance told our subcommittee that in 2017 there were 42 insurance carriers offeringliquor liability insurance. Now in 2024, there are 47. If the argument is that more insurance carriers will drive down premiums, why have they gone from $7.6 million to $17 million in written premiums annually statewide – more than double in the last five years?
Despite more insurers entering the arena, insurance companies are paying out more than 277% than they take in from premiums. They are losing money hand over fist in our State, which is why rates are going up. At first glance it looks like those restaurants and bars need tort reform to fix the problem. Again though, when you look into the data you see that in 2020 South Carolina had 170 claims made against restaurants and bars for liquor liability issues. That is double the amount of claims made in North Carolina and Georgia, and triple the amount made in Florida.
Why do we have triple the amount of claims than Florida? Could it be because South Carolina has the highest amount of DUI deaths in the country. Drunk drivers equal claims, and we have too many of them on our roads.
Last week Mothers Against Drunk Driving (MADD) came out against the tort reform measures being studied in the legislature, and they instead are calling for tougher drunk driving laws. I agree with them in part. Our DUI laws are a joke. As one law enforcement officer told me, the only way a person can be convicted of a DUI in South Carolina is if they plead guilty. We need stricter DUI laws, but we also need to protect restaurants and bars from frivolous lawsuits.
Too many restaurants and bars are being sued, not because they are liable, but because they have insurance coverage. If you overserve a customer and they injure someone, you should be liable. If you serve the person one drink, and then six hours and numerous drinks later, that person injures someone, then the server should not be liable. That is why this week I will file a bill that will protect restaurants and bars if they serve alcohol to someone so long as the person is not visibly intoxicated. Alabama and other states have passed this common sense legislation to protect restaurants and bars that are doing the right thing, but to make sure that the bad actors can be held accountable when someone is injured.
I am also co-sponsoring a bill to strengthen our DUI laws. Last year, I voted for a bill to require training for those who serve alcohol. Fixing our current problem is going to take a multi-prong approach. Comon sense liability reform, coupled with stricter DUI laws, and training of those who serve alcohol are together what is needed. Restaurants and bars that do the right thing don’t need to be punished for the bad acts of the few that don’t. I am committed to working so that South Carolina fixes this problem soon with ways that really address the problem and will make our roads safer for each of us.
Michael Johson represents District 16 in the South Carolina Senate. District 16 includes Tega Cay, Fort Mill and Indian Land. He can be reached at [email protected].
