Liquor liability insurance is a necessity for any South Carolina business that serves alcohol. Not only does liquor liability insurance protect establishments against significant financial damages, but as of 2017, establishments that are licensed to serve alcohol on-premises are required to have at least $1 million in coverage.
Also known as dram shop insurance, liquor liability insurance provides coverage for businesses that serve, sell, distribute, manufacture, or supply alcoholic beverages. Standard general liability insurance policies typically exclude liquor liability coverage, making dram shop insurance essential for businesses that generate a profit from alcohol.
Read on to learn more about liquor liability insurance in South Carolina, and contact KSA Insurance today to request a free quote.
What is Liquor Liability Insurance?
Liquor liability insurance provides liability coverage to businesses that serve alcohol on-premises. General liability insurance policies do not include this coverage, making liquor liability a necessity for any business that has a license to sell alcoholic beverages.
Liquor liability coverage can help cover costs for damages caused by an inebriated person who was over-served by an establishment. For example, if a person drinks at your establishment, chooses to drive while under the influence, and causes an accident, your establishment can be held liable for the damages.
In South Carolina, the state’s Supreme Court ruled that bars can be held liable for injuries caused by an intoxicated person if the bar over-served alcohol to a visibly intoxicated customer, which is a violation of state law.
In cases like these, liquor liability insurance can help cover legal costs, settlements, repair costs, and medical bills. Without liability coverage, businesses may be required to pay for these expenses out-of-pocket.
Who Needs Liquor Liability Insurance?
Liquor liability insurance offers essential coverage to any business that has a license to sell alcoholic beverages.
This might include:
- Liquor stores
- Grocery stores
It’s important to remember that liquor liability insurance doesn’t serve as a replacement or substitute for general liability insurance. Businesses like those listed above should carry both types of insurance policies to ensure they are fully protected against common risks.
Is Liquor Liability Insurance Required in South Carolina?
Yes, certain businesses are required to have liquor liability insurance in South Carolina.
In 2017, the South Carolina General Assembly passed legislation that requires any establishment with a license to serve alcohol for on-premises consumption after 5:00 P.M. to have at least $1 million worth of liquor liability coverage. Businesses that are not able to provide proof of coverage are not able to renew their licenses and serve alcohol to customers.
This law applies to new businesses that need to apply for liquor licenses and permits as well as establishments applying for renewal.
The intent of this law is to ensure that individuals who experience damages caused by an inebriated person who was over-served are able to seek restitution.
How Much Does Liquor Liability Insurance Cost?
In general, the primary factor used to determine the cost of liquor liability insurance is the percentage of your sales from selling alcohol. For example, a bar that generates most of its sales from liquor will typically pay more for insurance than a convenience store or grocery store with 10% liquor sales.
Other factors that can impact the cost of liquor liability insurance include:
- Industry: Certain industries may face higher insurance premiums due to increased risk
- Location: The location of your business can have an impact on your insurance costs.
- Coverage limits: Your premiums will be higher if you choose higher coverage limits. In South Carolina, the minimum coverage limit is $1 million.
- Claims history: Insurance companies generally view businesses with a poor claims history as higher risk, leading to higher insurance premiums.
The best way to find an affordable, comprehensive liquor liability insurance policy is to compare quotes from multiple insurance companies. You should also be sure to ask insurance carriers about discounts that your establishment may be eligible for.
Request a Quote
South Carolina establishments that serve alcohol need liquor liability insurance to comply with state laws and protect themselves against costly lawsuits and other expenses that may arise after an inebriated patron caused property damage or injury.
At KSA Insurance, we work with businesses in South Carolina and across the southeastern United States to help them choose liquor liability insurance policies that are affordable, compliant with state laws, and provide comprehensive coverage.
Contact us today to get a quote and learn more about liquor liability insurance in South Carolina.