By Vareva Harris, Co-Editor | Vareva@thewoodrufftimes.com
South Carolina restaurants that sell alcohol are preparing for major changes under the state’s Liquor Liability Tort Reform, known as Act 42, which takes effect Jan. 1, 2026. The law was passed to address rising insurance costs while increasing accountability and safety in alcohol service.
Under the reform, restaurants and bars can no longer be held fully responsible for damages simply because they served alcohol. Instead, liability is proportional, meaning an establishment is only responsible for the percentage of fault assigned to it by a court. However, restaurants may still face lawsuits if they are found to have knowingly served alcohol to an intoxicated person.
One of the most significant requirements is mandatory alcohol server training. All employees who sell or serve alcohol, including managers, must complete state-approved training that covers recognizing intoxication, checking identification, and understanding liquor liability laws. Proof of training must be kept on site.
The reform also establishes new liquor liability insurance requirements. Restaurants that sell alcohol for on-premises consumption after 5 p.m. must carry at least $1 million in liquor liability coverage, either through a standalone policy or an endorsement. However, businesses can reduce the required coverage by adopting risk mitigation measures, such as stopping alcohol service by midnight, ensuring timely staff training, limiting alcohol sales as a percentage of total revenue, or using digital ID scanners during late-night hours. Even with reductions, coverage may not fall below $300,000.
Failure to maintain proper insurance or comply with training rules can result in fines or suspension of alcohol permits by the South Carolina Department of Revenue.
Supporters of the reform say it strikes a balance between protecting businesses and promoting responsible alcohol service, while critics note that compliance costs may still be challenging for small, locally owned restaurants.
As the 2026 deadline approaches, restaurant owners across South Carolina are reviewing policies, updating training, and working with insurers to ensure they meet the new requirements and remain in good standing.
Author: Vareva Harris
