Behind the Menu: Liquor liability costs impact Grand Strand restaurants, bars

MYRTLE BEACH, S.C. (WBTW) — A massive increase in liquor liability costs in South Carolina could devastate businesses that service alcohol in the state unless changes are made, according to business owners.

The rates imposed by state authorities have skyrocketed over the past three years, especially in the past few months, business owners told News13.

Hypothetically, if someone has a single mimosa at brunch and then continues bar-hopping throughout the day and then has multiple drinks at a bar at the end of the day, is the restaurant that served that one mimosa at brunch just as liable as the establishment that served them, let’s say eight drinks, before got they behind the wheel?

Currently, in South Carolina, the answer is yes.

“We want to make sure that when these things happen, the responsibility is going to lie with the guilty party, not just a smattering of businesses that could be liable,” said Victoria Tobin, executive director of the Myrtle Beach Area Hospitality Association.

While some businesses might settle outside of court, there could be an establishment, Tobin said “that served somebody one mimosa at breakfast and they are still on the hook for that entire minimum amount.” In South Carolina, that minimum is $1 million policy.

The state General Assembly in 2017 passed a law requiring establishments with liquor licenses to purchase at least $1 million worth of liquor liability coverage. The legislation was passed in response to an incident in which a drunken driver without insurance left a bar, which also did not have insurance, and then crashed into a Dillon police officer, ultimately causing devastating injuries.

In the past year or so, businesses said they have experienced a major spike in their premium, according to Bubba Owens, the owner of Route 17 Roadhouse Bar & Grill.

“It’s really caused a lot of hardship on local bars and restaurants,” he said. “It’s a significant cost. You make 50 cents on a can of beer and then you have to give everything away at the end of the day.”

This year along, Owens said the cost has tripled — and that’s without being hit with a claim.

“I know some places here in Myrtle Beach [it is $40,000 to $45,000] a year just for liquor liability, and now these [policy] writers aren’t writing anymore,” Owens said.

There’s also a new problem arising.

“I’ve been called the last few weeks, people asking where am I getting my insurance, and I was sharing a company with a lot of people and that company has gone double on us, and they quit writing some policies,” he said.

Tobin said the number of insurance carriers for hospitality businesses has definitely decreased.

“There used to be, I think, over 30 carriers that were writing policies in South Carolina,” Tobin said. “It is now less than 10, probably closer to 5.”

It’s not just a problem at places with large bars. There are roughly 2,000 restaurants, 425 hotels and 90 championship golf courses that are part of the Grand Strand’s hospitality industry. Mix in clubs and concert venues that serve alcohol, and even if it’s a bar that has only eight seats like Dayton House Resort does, then they, too, must pay the cost.

“The plight of restaurants and hotels needs to be taken seriously, and it’s not just a restaurant and hotel issue, it is an entire state issue,” said Paul Garcia, managing director of the Dayton House Resort.

The Dayton House Resort has been open since 1970, and Garcia said the rate has gone up 220% for the property in the last 12 months.

“That’s not sharing with you what the other years have been, and in the other years, all of sudden we had to change companies because it wouldn’t insure us,” he said. “And for what? For no reason.”

Working with tighter margins, Garcia said, like many others in the industry, it’s been crippling and crushing to the point that many cannot afford the growing costs and have had to change their business models, or worse, close their doors.

“There’s no ceiling to this unless we take action, and we need to take action immediately,” he said.

Legislation was introduced in Columbia early this year to amend the law. However there has been little to no movement, and the Legislature is not back in session until next year. In the meantime, the industry has a message for lawmakers.

“Help us, help us all you can because it’s bad, it’s really bad,” Owens said.

Garcia called the situation ‘critical.”

“I would share with them that it is critical for South Carolina,” he said. “We are pro-business, pro-employee. We have always [believed] that there has to be a way they can meet and protect the customer, and the businesses, and the citizens. They need to do something immediately,” he said.

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Adriana Cotero is News13’s weekend evening anchor and a morning reporter. She joined the team in July 2023 after working in the island of Guam. Adriana is from Saline, Michigan, and graduated from Central Michigan University. Follow Adriana on Facebook , X, formerly Twitter, and Instagram and read more of her work here .

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Adriana Cotero is News13’s weekend evening anchor and a morning reporter. She joined the team in July 2023 after working in the island of Guam. Adriana is from Saline, Michigan, and graduated from Central Michigan University. Follow Adriana on Facebook , X, formerly Twitter, and Instagram and read more of her work here .

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