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A major policy reversal is unfolding at the Statehouse as the SC senate to suspend liquor liability insurance mandate moves forward, a dramatic response to mounting complaints from bars and restaurants that say rising premiums are squeezing them out of business like a tightening vice.

Senate Adds Suspension to Budget Plan

South Carolina senators approved a one-year pause on the state’s liquor liability insurance requirement on Wednesday, attaching the measure to the $15.3 billion budget proposal in a voice vote.

The provision would temporarily suspend the law requiring bars and restaurants to carry minimum insurance coverage for alcohol-related incidents. However, the change is not final—it still must survive negotiations with the House before becoming part of the final spending plan.

Shane Massey, who introduced the suspension, made clear the move is not a permanent fix but a forced timeout designed to push lawmakers toward a long-term solution.

The suspension would run through the fiscal year ending June 30, 2027.

Lawmakers Clash Over Failed Insurance Reform

The dispute traces back to a 2017 law requiring establishments serving alcohol after 5 p.m. to carry at least $1 million in liquor liability coverage, designed to protect victims if an intoxicated patron caused harm.

But business owners say the result has been the opposite of what was intended—insurance premiums surged, some insurers exited the market entirely, and smaller bars and restaurants either closed or never opened.

Last year, lawmakers attempted a compromise: keeping the $1 million baseline while introducing tiered reductions based on business practices, such as alcohol sales percentage or early closing hours.

In theory, a restaurant earning less than 40% of revenue from alcohol could reduce coverage by $100,000, while closing before midnight could cut another $250,000.

“A System That Doesn’t Exist”

But according to Massey, the structure has collapsed in practice because insurers are not actually offering policies under those tiered reductions.

“The problem is that no insurer actually offers such policies,” he said, describing a system that exists on paper but not in the marketplace.

He also criticized mandatory employee alcohol training requirements tied to the law, saying they added confusion rather than reducing costs.

“That has been an unmitigated disaster,” Massey said.

Business Owners Feel the Pressure

Sen. Brian Adams said the impact is already visible. He is attempting to open a bourbon bar in Summerville but was unable to find coverage below the $1 million threshold—even though his business qualified for reduced requirements under the law.

“They said either they’re going to cover us for $1 million, or they will not cover us,” said Adams, a Goose Creek Republican.