South Carolina’s legal system is making it harder for small businesses to survive. A new bill aims to fix that.
You can help advocate for our state’s small businesses by contacting the State Senate Judiciary by February 19 through this message form.
Unsure of what you should write? Here are a few examples that you can personalize, copy and paste into the contact form and send to our legislators.
Tort reform is about changing laws that determine how much responsibility businesses and individuals have when someone is injured in an accident. In South Carolina, a rule called “joint and several liability” means that if a business is found even partly responsible for an injury, it could be required to pay the full amount of damages, regardless of how small its role was.
For example, if a business is just 10% at fault in an incident, it might still be forced to cover 100% of the damages. This is a major concern for small businesses, which make up most of South Carolina’s economy, because it can lead to skyrocketing insurance costs and financial instability.
Lawmakers attempted to fix this issue in 2005, but a 2017 court ruling (Smith v. Tiffany) created legal uncertainty. Now, a new bill is being proposed to ensure businesses are only responsible for their fair share of damages, just as originally intended.
Tort laws have a direct impact on local businesses, especially in industries like hospitality, construction and transportation. One major concern is the sharp rise in liability insurance costs.
- Restaurants and bars are seeing steep insurance premium increases due to legal risks. Brew Cellar, a local business, had to close after liquor liability insurance became too expensive. Uptown Social, another Charleston business, saw its insurance premiums jump by 825% since 2018—despite having no major claims*.
- Construction companies are also affected. Rising liability costs are driving up the price of housing and commercial projects, which makes it harder for businesses to expand.
- Although the rate of fatal truck accidents has been decreasing, lawsuits against trucking companies have increased at unprecedented rates. Truck drivers often carry large insurance policies that make them the target of lawsuits in our current legal climate regardless of their percentage of fault.
These legal challenges are not just hurting individual businesses, they’re slowing job growth, limiting investment and making it harder for new businesses to succeed.
Understanding how laws can impact a business can be challenging. Unless you have experience or a legal dictionary in hand, the jargon and scenarios can become overwhelming and difficult to understand.
Below are a few purely fictional stories that provide hypothetical example of how laws could potentially impact businesses.
Bars & Restaurants Example Scenario
On her first day off in weeks, Jane started her Friday with two mimosas at her favorite brunch spot before heading to a nearby pub. By 4:00 p.m., Jane had 8 cocktails and was visibly intoxicated but chose to drive home, crashing into another vehicle and seriously injuring Pete.
Pete settled with Jane’s insurance and the pub, who were both modestly insured. However, Pete’s attorney pursued the brunch spot, which had the largest insurance policy. Despite Jane having only two drinks there, civil liability laws held the brunch spot fully responsible, leading to a costly lawsuit.
As a result, the brunch spot faced soaring liquor liability premiums, forcing them to either charge patrons more to counteract their rising overhead or risk closing their doors.
Construction Companies Example Scenario
New Home Construction Co. had been a trusted name in the community for over 75 years, known for its exceptional craftsmanship and strong partnerships with subcontractors who shared their commitment to quality. Over the years, they had earned a reputation as one of the best builders in the state.
Excited about expanding their work, New Home Construction Co. decided to build a new workforce housing community to provide affordable housing for local workers. However, when they reached out to their insurance broker for general liability insurance, they were shocked by the high premiums they were quoted. The broker explained that South Carolina’s laws were creating a new risk for insurance companies, as claims could be filed indefinitely if gross negligence was proven. This “no statute of repose” situation was driving up insurance costs across the industry.
Unfortunately, the rising insurance premiums, combined with the increased risk of litigation, made it impossible for New Home Construction Co. to move forward with the workforce housing project. They could no longer balance the high costs of insurance and litigation with the need to keep the housing units affordable for the community. As a result, the company had to abandon their plans for the project.
Businesses with Fleets Example Scenario
18-Wheeler Trucking has been in business for over 50 years, specializing in hauling widgets. One afternoon, an 18-Wheeler Trucking truck was stopped at a red light behind a station wagon when a speeding SUV rear-ended it, pushing the truck forward and into the station wagon. The SUV driver was uninsured, leaving 18-Wheeler Trucking to face the lawsuit alone.
Hoping to share liability, 18-Wheeler Trucking tried to bring the uninsured driver into the case. But under current law, an uninsured driver who settles with the plaintiff cannot be listed on the verdict form for fault allocation. As a result, 18-Wheeler Trucking was held fully responsible for damages, despite the SUV causing the crash.
Trucks move over 72% of all goods shipped in America and more than 90% of trucking firms are small businesses. Yet in South Carolina, staying in business as a small trucking company is becoming increasingly difficult. With lawsuit costs rising and limited legal protections, small trucking businesses like 18-Wheeler Trucking are increasingly vulnerable, making it harder to keep goods moving and companies afloat.
If residents of South Carolina advocate for tort reform and our state legislators pass it into law, it would be a huge victory for small businesses, who make up over 99% of the businesses in the state. With the passing of S.224 we would hope to see:
- Fairer accountability: Businesses would only be responsible for their actual level of fault.
- Lower costs: Reducing unnecessary lawsuits can decrease liability insurance rates.
- Support for small businesses: Businesses like restaurants, contractors, trucking firms and many more would be protected from unfair financial burdens.
- Stronger legal protections: Insurers would no longer be pressured into quick settlements, ensuring fair case handling.
As part of the Chamber’s advocacy efforts, we are committed to advancing S.244 through the Senate Judiciary Committee, securing its passage in both the House and Senate and ensuring it becomes law. Our advocacy work is driven by our members, who shape our priorities and guide us on the issues that matter most to them. Their support and engagement make this work possible.
If you’re interested in getting more involved with the Chamber’s Government Relations efforts at the state level, please contact Bailey Vincett at bvinvett@charlestonchamber.org.
