- Rising claim costs, large judgements, settlement payouts and high coverage rates are causing insurance premiums to skyrocket, which many small entertainment venues can no longer afford.
- Bill 116 requires a $1 million insurance policy, in-case an establishment is part of an alcohol-related accidents.
- Insurance carriers report that for every dollar collected in premium, two dollars are paid out in claims and expenses, according to Michael Wise, director of the South Carolina Department of Insuranc
Rotties 221 Biergarten provided shows by local entertainment after remodeling a building that was more than 100 years old on South Main Street in Woodruff.
The entertainment venue was remodeled from the ground up and opened in September 2019 and survived COVID-19 lockdowns, supply shortages and rising food costs. After surviving several tough years, the business couldn’t afford rising insurance costs and closed on July 30, 2023.
The rate increases are especially intense for establishments that make most of their money on alcohol sales as opposed to restaurants that make much of their revenue on food.
“We started with a dirt floor, no electrical, no sewer, no water, no heat. We put that all in a building that was over 100 years old. COVID hit us, and we survived that and kept growing every year, and then this was the ultimate, ‘No, we can’t survive this,'” said Yana Kosic Allen, owner of the biergarten.
Allen said she was quoted a price of more than $25,000 for her insurance this year and a monthly payment of approximately $2,000. Last year, she said she paid $300 a month.
“We never had any (insurance) claims,” she said. “We always had the million-dollar coverage because when we opened that’s what we understood. You can’t get a liquor license without showing that million-dollar coverage.”
Alcohol-related deaths on the rise in South Carolina
South Carolina law requires businesses with an alcohol license that sell alcohol after 5 p.m. to maintain liquor liability insurance of at least $1 million. The law passed in 2017 so businesses have insurance to pay for damages victims suffer in alcohol-related accidents.
The law was enacted after a fatal DUI crash in 2014. It turns out that the accused nor the bars she went to had insurance.
According to new 2021 data released by the National Highway Traffic Safety Administration (NHTSA), alcohol-related deaths in South Carolina spiked 26% from 2020 to 2021, on top of a 14% increase the prior year. The state went from 319 fatalities in 2020 to 401 in 2021.
The rising cost forced Kosic Allen to close her business and she said she is not the first to close their business and will not be the last.
“People need to know more about it, and the word is getting out, but unfortunately, a lot of places are closing before anything can get done,” she said.
Venues in Greenville are facing similar challenges. Powdersville Pub closed due to the insurance increases, said Kesha Moore, who owned the pub. In 2020, Moore said she paid between $8,000 to $12,000 per year for a general and liquor liability policy. When the coverage ended in 2023, she said she was scheduled to pay nearly $22,000 for yearly coverage.
“Open claims are what skyrocketed insurance agencies to not want to cover an establishment,” Moore said. “If at any time, your venue got a claim and someone sues your insurance, it would show up as an open claim, which could take years to get resolved. Many insurance companies pulled out of South Carolina or had unreasonable financial demands.”
Supporters organizing against liability insurance costs
A recently formed advocacy group, SC Venue Crisis, also believes these increases could destroy the local music industry and is working to raise awareness and make changes statewide.
“People focus a lot on alcohol, but … this is (about) restaurants. This is about small businesses, anyone that can be affected,” said Brittany Brandt, a researcher for the group in Spartanburg.
Currently, the group is raising awareness through social media and town halls held at bars, restaurants and entertainment venues throughout the state.
Brandt and the venue crisis group are informing the public and venue owners that the insurance rates will have an adverse effect on musicians, comedians and the artists and technicians who work with them. The fewer venues there are, the more competition and fewer opportunities available for those whose livelihoods rely on live performances.
“That affects jobs, countless jobs, and our tourism,” Brandt said. “There’s not going to be a thing that it doesn’t touch.”
Musicians struggling to find work in Greenville, Spartanburg
TJ Jeter, a local musician, said the past few years have been difficult for musicians because of COVID-19 forcing venues to close, and now the rising insurance rates.
“The last couple of years, as musicians, have been stressful,” Jeter said. “We came out of COVID, and now having to navigate this. What do we do if a venue has to cut out live music or just close down in general? The biggest impact was Smiley’s Acoustic Café in Greenville. They had to close down, and it dealt a blow to a lot of musicians.”
Shane Pruitt, lead singer of the Shane Pruitt Band, said the state law requiring $1 million in liability insurance isn’t fair for everyone.
“There’s been some places I’ve played at in the past that have had to close down,” Pruitt said. “It’ll hurt everyone from the small business owner to the people who work there to the people who play there to make a living. What’s the point of trying to open a new business when you have to go through all that red tape?”
He is concerned about the tough competition between musicians looking for work.
“It’s always going to be given to those (musicians) who lowball the most,” Pruitt said. “You can have a band that charges $500 and they’re great. Then there’s someone who will perform for $300, they’re going to go for the one that’s cheaper.”
Spartanburg’s Fayssoux McLean, a longtime staple in the Hub City music scene, said musicians cannot grow if they do not have the ability to perform locally.
“That’s how you grow, by playing locally to broaden your scope,” McLean said. “I can name several places that I’ve played at that were affected. This is where we learn, especially when you’re new and still learning. You learn your skills and then broaden out, and be proud we performed at these places.”
In addition to performing live, Jeter said he’s performing for weddings and other events.
“I’m accidentally, ahead of the curve,” Jeter said. “I always try to look for what I can be doing next, but I got lucky with the timing. I feel sorry for the guys that are just now getting into it. It will be terrible for musicians, and these guys will have to pivot.”
Anderson venue owners reaching out to state officials, lawmakers
When Moore, past owner of Powdersville Pub, called her State Rep. Thomas Beach, who serves Anderson, Pickens and Greenville counties, her concerns were direct after searching for various options for new insurance as prices began to rise out of control.
“For so many businesses and livelihoods at stake, it’s a shame we have to wait until January,” Beach said. “We have families and people who are trying to provide, and I’m trying to protect that natural right and that is what is important to me.”
According to Beach, to make any change, Gov. Henry McMaster would have to call the Legislature back into session prior to January through an executive order. Statehouse and Senate members would have to revisit the law and go through a committee process to help regulate insurance rates for small entertainment establishments.
While the S.C. Department of Insurance does not have the authority to compel companies to offer liquor liability coverage, they realize the timeliness of the matter.
“We are aware of challenges facing South Carolina business owners today pertaining to the affordability and availability of liquor liability insurance,” said Michael Wise, director of the South Carolina Department of Insurance. “The Insurance industry tells us that several factors are at play when determining the cost of this vital coverage, including rising claim costs, large judgments, settlement payouts, and high coverage.”
Wise also said insurance carriers have recently reported that for every dollar collected in premiums, two dollars are paid out in claims and expenses. He added that carriers are losing money, and this has resulted in fewer willing to provide the insurance in the state.
Currently, the Insurance Department is working to gather data from insurance carriers to provide the Legislature as it works to identify solutions for business owners.
How to help small entertainment venues stay alive in South Carolina
In Piedmont, Kynn Tribble, owner of Tribble’s Bar & Grill, is currently assessing an estimate between $50,000 to $100,000 in insurance for his establishment through 2024.
In 2021, Tribble’s insurance cost $5,000 per year. In 2022, it shot up to $20,000 due to open insurance claims pending against their bar.
“To sue someone with no personal responsibility is what is hurting us,” said Tribble. “We’re held accountable for someone else’s actions. You find bottles in parking lots, tall boy beers and even empty medicine bottles.”
Tribble has taken precautions to keep his bar & grill safe, including keeping the Uber app downloaded on a mobile device to drive overly intoxicated patrons home, ending alcohol service an hour prior to closing at 2 a.m. and permanently banning individuals who bring in outside alcohol.
The challenge is to urge locals to take action by asking lawmakers to help the cause.
“We want people to contact their senators, their representatives and email the governor,” said Tribble. “We need people to use their voice and remind them that bars are not just local watering holes. We’re charitable, host celebrations of life, and it’s a community of people.”
A.J. Jackson covers the food & dining scene, along with arts, entertainment and more for The Greenville News. Contact him by email at [email protected], and follow him on Twitter @ajhappened.
Samantha Swann covers city news, development and culture in Spartanburg. She is a University of South Carolina Upstate and Greenville Technical College alumna. Contact her at[email protected] or on Instagram at @sam_on_spartanburg.
Joanna Johnson covers trending topics and community news for the Herald-Journal Reach her at [email protected].
