Proposed Tort Reform Legislation in South Carolina: Insurance Industry Perspective
Comprehensive tort reform legislation is on the agenda for the 2025-2026 legislative session in South Carolina. Senate Bill S. 244 was introduced in January 2025 and recently debated in the Senate Judiciary subcommittee. The proposed legislation has a number of potential impacts on the insurance industry.
Probably the biggest and most hotly contested proposal would change how fault is apportioned amongst tortfeasors in South Carolina. The current law has been criticized for allowing juries to impose liability on defendants for all damages in a lawsuit regardless of the defendant’s percentage of fault. The proposed legislation would change this and permit juries to apportion fault between the claimant and a number of potential tortfeasors, whether they are parties to the action or not. Currently, only named defendants appear on South Carolina jury verdict forms. Under the proposed legislation, there is the potential for juries to apportion fault to non-parties. If the legislation is enacted, defendants will now only be responsible for their percentage of fault.
How insurance bad-faith claims involving a liability, an underinsured motorist, or an uninsured-motorist claim are handled in South Carolina would also be significantly updated. The proposed legislation would impose limits on what is actionable in a bad-faith claim under South Carolina law. Further, the legislation would affirmatively place a duty on the insured, claimant, and representative of the insured to act in good faith in furnishing information regarding the claim, in making demands of the insurer, in setting demand-response deadlines, and in attempting to settle the claim, which may be used to reduce bad-faith damages awards against insurers. Finally, the legislation would define when and how insurers must pay when two or more third-party claimants have competing claims arising out of a single occurrence, which, in the aggregate, may exceed the available policy limits of one or more of the insured parties.
Other changes are proposed to South Carolina liquor license and liability laws that will impact coverage requirements, licensure requirements, liability, and who may write liquor liability policies in South Carolina. Mandatory uninsured and underinsured automobile insurance policies would be impacted by eliminating any requirement for coverage for punitive or exemplary damages. In the medical malpractice context, the proposed legislation would circumscribe the definition of “occurrence” and further proposes changes to how noneconomic-damages limitations are applied against health care providers or institutions.
At publication, the tort reform bill is in the public comment phase. It appears to have strong backing from the hospitality industry and business community and those advocating that South Carolina follow the lead of neighboring states like Florida and Georgia in eliminating joint and several liability. While difficult to predict a legislative outcome, this is the most comprehensive tort reform bill that has been presented in South Carolina in quite some time, and we will be watching it closely.
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