Locally owned businesses in Lexington County are dealing with the increasingly problematic effects of a bill that requires businesses with liquor or beer licenses to maintain a liability insurance policy that covers at least $1 million.

The requirement came from a bill passed in 2017 known as Bill 116. The bill's impacts have been felt all across the Palmetto State, as more than 10 businesses have shut their doors due to the insurance requirements. 

And a West Columbia staple could join those shuttered establishments if policies don’t change soon.

Phill Blair, owner of WECO Bottle and Biergarten, said the business’ insurance rate increased about 300% when it renewed the policy in October. 

His liquor liability insurance now costs about $50,000 a year, averaging at more than $4,000 a month.

“Not only do we have zero claims here… We don't even serve liquor and most of our stuff is to go,” Blair told the Chronicle. “I can't think of the reason why it would triple in one year with no incidents whatsoever, other than it's what's happening to everyone.”

Insurance in and around Lexington hasn’t always been this expensive. Prior to 2017, the typical policy cost about $5,000 a year, according to Asheton Reid, owner of Rockerbelles in the Upstate town of Piedmont. 

Reid also serves as the director of community outreach for S.C. Venue Crisis, an organization created in response to businesses needing somewhere to turn for support and collaboration in face of the insurance challenges.

County business owners are wary of the impacts the bill will continue to have if it’s not handled soon.

“If our insurance doubled again there's no way we could pay it. There's no math that makes that happen,” Blair said. “The only way to pay that amount would be to double our prices. But that puts you out of business anyway, right?”

Matt O’Hara, owner of O’Hara’s Public House and Bakery Cafe along Lexington’s Main Street is also worried about increasing his prices.

Like many businesses, O’Hara has slowly raised his prices to keep up with inflation, but he worries he may have to raise them higher if his insurance increases.

“I don't think we can pay for it with food sales unless I raise my prices and I already feel like I'm as high as I can be on food,” said O’Hara. “I would have to sell burgers for $20 to be able to make it on food.” 

O’Hara hasn’t faced any severe increases in his insurance policy. He said this is only because of his status as a full-service restaurant rather than a bar.

“On my particular policy, it says full-service restaurant with no dance floor. That's the classification,” O’Hara said. “If you have a dance floor your liquor liability is going to be significantly higher.”

To be considered a full-service restaurant, O’Hara’s annual food profits had to make up more than 55% of its revenue. During his last renewal in March, 60% of his annual revenue was from food.

But without his bar, he doesn’t think his business would be worth it.

“We're in a very positive place where my business is primarily a restaurant,” O’Hara said. “My hope when people come in to have a meal is that they might have a cocktail or two. That's kind of where we get to make our money.”

Blair said he has spoken with other business owners who are losing profits.

“I had a very popular place tell me they have not made a penny in profit since their insurance went up six months ago,” Blair said. “They're sustaining, but they're not making money. And they're waiting for something to happen to get them back to being profitable.”

With the state Legislature out of session until Jan. 9, even if the legislation is amended, there may not be enough time for businesses like WECO.

“Rates aren't going to just magically drop, the markets going to have to drive them back down,” Blair said. “If these insurance companies have been getting 10-fold what they were getting, they're not going to just let it go because somebody said so.”

The impact of businesses closing would be damaging to the community, Reid posited.

“It would be detrimental … because of the ripple effect,” Reid told the Chronicle. “Not only is it a potential staple business in the community closing, but that leads to unemployment, then utility companies lose money and rates raise for farmers that provide local food to the community.”

 “It just has a drastic ripple effect, not including the tax dollars and the revenue that would be missing, which is millions if not billions of dollars on an annual basis which then goes to education and police and things of that nature,” Reid added.  

Reid urged businesses to be transparent about their struggles, citing the lack of transparency as the S.C. Venue Crisis’ biggest obstacle. 

“We're not really sure why some business owners aren't being as open and transparent about the numbers,” Reid said.“We need owners to be transparent with their people and utilize social media as much as possible.” 

“When you don’t put these numbers in layman's terms for someone who doesn't deal with business insurance on a daily basis, they don’t fully comprehend the astronomical increase in the prices,” she added.

Business owners like Blair plan to take more action in the coming weeks.  

“In January, hopefully, they take it up and do something quickly because there's no way past it,” Blair said. “It's just a big wall that nobody's really talking about.”

Jordan Lawrence contributed to this report.