Photo: Gage Skidmore from Surprise, AZ, photo used under Creative Commons Attribution-Share Alike 2.0
South Carolina business owners are facing mounting insurance costs, with many attributing the sharp increases to the state's legal framework for personal injury lawsuits.
Trial lawyers are happy, but entrepreneurs like Josh Painter, who operates Kirby Sanitation, told the South Carolina Daily Gazette that he had seen his insurance premiums rise by as much as 30% annually, with the added costs inevitably being passed on to customers.
A key concern among local business owners is the state’s current liability laws, which can require a company to pay the full amount of damages in a lawsuit, even if it is only minimally responsible for an incident. This system has led to skyrocketing insurance premiums, with some business owners worried that a single lawsuit could put them out of business.
In response, a proposed bill, backed by Gov. Henry McMaster, seeks to reform the state’s liability laws to ensure businesses only pay damages proportional to their level of responsibility. The legislation has sparked a heated debate, pitting Republicans against one another, as well as trial lawyers against insurance and business advocates.
Read more: Trial lawyers under fire
Supporters argue the bill aligns South Carolina with other Southeastern states and would prevent businesses from being unfairly burdened with excessive legal payouts. "You should never be responsible for what I cause," said Senate Majority Leader Shane Massey, a key advocate for the reform. He contends the current system discourages insurers from operating in the state, leading to fewer options and higher costs for policyholders.
Senate Republicans have launched a six-figure advertising campaign to combat what some are calling a shadowy campaign to kill the bill which might dent trial lawyers’ fees.
Opponents, including Donald Trump Jr and the pro- attorney South Carolina Association for Justice, argue that the bill benefits insurance companies at the expense of accident victims, making it more difficult for injured parties to receive adequate compensation. Sen. Tom Fernandez, R-Summerville, who’s also a lawyer has claimed that the pro-attorney lobby seeking to block the bill offered him $50-100,000 per campaign to help block the bill.
Hey South Carolina, what’s going on with this? This bill seems like a complete disaster. Hopefully the legislature gets smart and strikes this down! https://t.co/6N4DTxteyE
— Q Trump Jr. (@QTrump1) February 12, 2025
The legislation addresses multiple aspects of business insurance, including liability for alcohol-serving establishments, medical malpractice claims, and construction defects. Restaurant and bar owners have been particularly affected by insurance hikes, following a 2017 law that mandated businesses serving alcohol past 5 p.m. carry a minimum $1 million liquor liability policy. Since then, the number of insurers offering full coverage in South Carolina has dwindled, further inflating costs for hospitality businesses.
Insurance industry representatives have largely remained on the sidelines of the debate, refraining from public testimony on whether the bill would lead to lower premiums. Nonetheless, some lawmakers point to states like Florida, where legal reforms were followed by a reduction in some insurance rates.
As discussions continue in the South Carolina Senate, business owners, attorneys, and policymakers remain divided on the long-term impact of the proposed changes. The bill's fate will likely be determined by the ongoing tug-of-war between protecting businesses from financial ruin and ensuring fair compensation for accident victims.
