South Carolina H 4087: Liquor Liability

Bill Text

2025-2026 Bill 4087 Text of Previous Version (Feb. 25, 2025) - South Carolina Legislature Online 

South Carolina General Assembly
126th Session, 2025-2026

Bill 4087

Indicates Matter Stricken
Indicates New Matter

(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

A bill

TO AMEND THE SOUTH CAROLINA CODE OF LAWS 
BY AMENDING SECTION 38-1-20, RELATING TO DEFINITIONS, SO AS TO AMEND THE 
DEFINITION OF "EXEMPT COMMERCIAL POLICIES"; AND BY ADDING CHAPTER 105 TO TITLE 
38 SO AS TO REQUIRE INSURERS OFFERING LIQUOR LIABILITY INSURANCE TO ESTABLISH 
RISK-BASED PRICING, TO ESTABLISH A LIQUOR LIABILITY INSURANCE FUND, AND TO 
REQUIRE ANNUAL REPORTING TO THE DEPARTMENT OF INSURANCE, AMONG OTHER THINGS.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. Section 38-1-20(22) of the 
S.C. Code is amended to read:

 (22) "Exempt commercial policies" means policies for commercial 
insureds as may be provided for in regulation issued by the director. Exempt 
commercial policies include all property and casualty coverages except for 
insurance related to credit transactions written through financial 
institutions. Exempt commercial policies do not include 
liquor liability policies or general liability insurance policies with a liquor 
liability endorsement that are required to be maintained by a person licensed 
or permitted to sell alcoholic beverages for on-premises consumption pursuant 
to Sections 61-2-245 or 61-4-1515(10).

SECTION 2. Title 38 of the S.C. Code is 
amended by adding:

CHAPTER 105

Liquor 
Liability Insurance

 Section 
38-105-10. Any insurer providing liquor liability 
insurance coverage in South Carolina as defined in Section 61-2-145 must 
establish a risk-based pricing model incorporating the following factors:

 (A) claims history related to 
alcohol-related incidents, including prior dram shop claims, which must account 
for no less than forty percent of the premium calculation;

 (B) implementation of state-approved 
responsible alcohol service training programs including, but not limited to, 
ServSafe Alcohol or Training for Intervention Procedures (TIPS), which must 
account for no less than twenty-five percent of the premium calculation;

 (C) use of preventative technology 
such as ID scanners and intoxication monitoring tools, to prevent underage 
drinking and over service, which must account for no less than twenty percent 
of the premium calculation; and

 (D) adoption of safety protocols, such 
as employee intervention policies and transportation assistance programs, which 
must account for no less than fifteen percent of the premium calculation.

 Section 
38-105-20. Establishments with no alcohol-related claims exceeding twenty-five 
thousand dollars in the prior three years and verifiable compliance with 
responsible service training, preventative technology, and intervention 
policies must receive a minimum fifteen percent reduction based on the 
insurer's standard base rate for similar establishments, as determined by the 
South Carolina Department of Insurance. The base rate must be calculated using 
a three-year rolling average of industry standard pricing data, adjusted for 
risk exposure, at the discretion of the South Carolina Department of Insurance.

 Section 
38-105-30. Establishments with three or more alcohol-related claims exceeding 
twenty-five thousand dollars each within a five-year period may be classified 
as high-risk and subject to increased premiums or coverage restrictions.

 Section 
38-105-40. (A) A state-administered 
Liquor Liability Insurance Fund is established to provide coverage options for 
high-risk establishments unable to secure affordable private insurance due to 
excessive claims or increased liability exposure.

 (B) Funding for this program shall be 
provided through:

 (1) a surcharge on liquor liability 
insurance policies, not to exceed two percent of premiums;

 (2) a portion of alcohol licensing 
fees collected by the State; and

 (3) contributions from private 
insurers participating in risk-sharing agreements.

 (C) To qualify for coverage under the 
state-administered fund, an establishment must:

 (1) demonstrate implementation of 
corrective action plans to reduce alcohol-related risks;

 (2) participate in ongoing compliance 
monitoring programs;

 (3) undergo annual safety audits 
conducted by the South Carolina Department of Revenue's Alcohol Regulation 
Division; and

 (4) contribute to a victim 
compensation fund in the event of a claim paid by the state insurance pool.

 (D) A portion of premiums collected 
through the state-backed fund must be allocated to a victim compensation fund 
to ensure timely payment for victims of alcohol-related incidents when an 
at-fault establishment has insufficient coverage.

 Section 
38-105-50. Insurers providing liquor liability policies 
in South Carolina must disclose their rate-setting criteria, including:

 (A) th