South Carolina Alcohol Businesses Gain Clarity on Liquor Liability Insurance Requirements and Cost-Saving Mitigation Options

Viva Beverage Law has announced updated guidance to help South Carolina alcohol businesses understand liquor liability insurance requirements and new opportunities for coverage mitigation. The firm is expanding its educational outreach to help retailers, restaurants, manufacturers, and hospitality businesses remain compliant with state law while identifying potential cost-saving measures tied to coverage obligations. Under South Carolina Code Section 61-2-145, a business licensed or permitted to sell beer, wine, or liquor for on-premises consumption and that remains open after 5 p.m. must maintain a liquor liability insurance policy, or a general liability policy with a liquor liability endorsement, with total coverage of at least $1 million during the period of the biennial permit or license. This legal requirement establishes a significant financial obligation for many establishments operating in the state's hospitality sector.

The guidance highlights important mitigation factors that may reduce this required annual aggregate limit by $100,000 to $500,000 depending on which criteria are met. These include stopping alcohol service by midnight, requiring employees to complete an approved alcohol server training program, keeping alcohol sales below 40 percent of total revenue, or using a qualifying forensic digital ID verification system between the hours of midnight and 4:00 am. The South Carolina Department of Revenue provides official documentation regarding these mitigation opportunities. Beginning November 1, 2025, new applicants and renewing licensees will be able to submit mitigation documentation through MyDORWAY. Qualifying reductions may take effect for liquor liability policies beginning January 1, 2026. Coverage must be at least $300,000 for permanent licensees and $150,000 for special event licensees once mitigation is applied.

The updated guidance comes as regulations continue to evolve in South Carolina's alcohol industry. Viva Beverage Law focuses its practice on South Carolina beverage law and assists clients with alcohol licensing, compliance requirements, and related administrative procedures. Founder Lauren Acquaviva spent six years litigating alcohol licensing and tax matters at the South Carolina Department of Revenue, giving the firm insight into regulatory decisions and licensing issues. The firm works with breweries, distilleries, restaurants, retailers, wholesalers, and importers on a range of alcohol law matters. The new guidance represents an important resource for businesses navigating the complex regulatory landscape, particularly as they prepare for upcoming compliance deadlines and potential cost-saving opportunities through proper documentation of mitigation measures.