South Carolina Senate Advances Tort Reform to Address Liquor Liability Insurance Challenges

South Carolina Senate Approves Comprehensive Tort Reform BillThe South Carolina Senate has successfully passed a significant tort reform bill, aimed at tackling the mounting issues faced in the liquor liability insurance sector. The legislation, known as Senate Bill 244, proposes revisions to liability regulations, damage compensations, and insurance mandates for bars, restaurants, and nonprofit organizations.Key Provisions of Senate Bill 244The bill outlines crucial amendments to the joint and several liability rules. Businesses will now be obligated to cover economic damages proportional to their degree of fault in an incident. However, if a business is adjudged to be over 50% at fault, it will still be liable for the entire economic damages. In terms of noneconomic and punitive damages, these will be distributed according to the level of fault attributed to each party involved.Additionally, the bill proposes a reduction in the minimum required liquor liability insurance coverage, decreasing it from $1 million to $500,000 for most establishments, and to $300,000 for certified nonprofit organizations.Background and RationaleThis legislative action is a response to the increasing pressures faced by liquor liability insurers in South Carolina. Recent changes in state legislation have enabled plaintiffs to hold establishments accountable for the actions of their intoxicated patrons, particularly in cases involving drunk driving incidents.As highlighted in a report from the South Carolina insurance department, insurers offering liquor liability coverage in the state have faced significant losses, paying out $1.77 for every $1 in premium earned since 2017. In the worst recorded year, this figure surged to $2.60 per dollar earned.Efforts to obtain comments from the bill’s sponsors and the South Carolina Insurance Association were unsuccessful.Additional Legislative EffortsSenate Bill 244 is part of a broader legislative initiative. Lawmakers are simultaneously considering Senate Bill 397, introduced by Senator Deon Tedder, which seeks to enhance reporting requirements for insurers providing liquor liability policies. Senator Tedder emphasized that the objective is to achieve greater transparency concerning the market’s operations and the determination of premiums.