Top 7 Insurance Mistakes South Carolina Restaurant Owners Make

By Brad Davis, CIC (August 11, 2025)

Running a restaurant in South Carolina is no easy task. Between staffing, food costs, customer expectations, and health inspections, insurance might not be top of mind—until it’s too late.

As a local, independent insurance agency based in Myrtle Beach, we’ve helped many restaurant owners review and improve their coverage. And over the years, we’ve seen some common mistakes that can lead to costly surprises.

If you own or manage a restaurant in South Carolina, here are the top 7 insurance mistakes we recommend avoiding:

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1. Assuming General Liability Covers Everything

General Liability is essential, but it’s not a catch-all. It typically covers things like slip-and-fall injuries to customers, but it doesn’t cover:

• Employee injuries (that’s Workers’ Comp)

• Alcohol-related claims (that’s Liquor Liability)

• Food spoilage or equipment breakdown

Relying solely on General Liability is one of the biggest gaps we see.

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2. Not Carrying Liquor Liability (When You Serve Alcohol)

South Carolina holds restaurants responsible for damages caused by overserving alcohol. If your restaurant serves beer, wine, or cocktails (even if it’s just a small part of your business) – you need Liquor Liability insurance.

Without it, a single claim could put you out of business.

Resources: South Carolina Department of Revenue (SCDOR) and South Carolina Legislature – Code of Laws. As the resaurant owner, you are responsible for understanding and complying with state, local, and all laws.

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3. Underinsuring Property and Equipment

Kitchen equipment, walk-in coolers, furniture, signage—it all adds up. If your coverage limits are outdated or based on guesswork, you might not be able to replace everything after a fire, storm, or major loss.

Tip: Review your property coverage regularly, especially if you’ve remodeled, upgraded equipment, or expanded seating.

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4. Forgetting Business Interruption Coverage

Imagine your restaurant shuts down for a month due to a fire or hurricane damage. Even with property insurance, you’ll still lose revenue—and bills don’t stop.

Business Interruption coverage (also called Business Income coverage) helps replace lost income while you recover. In coastal South Carolina, where storms can force extended closures, this coverage is especially important.

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5. Overlooking Workers’ Compensation Requirements

South Carolina requires most businesses with four or more employees to carry Workers’ Comp insurance. But even if you’re below that threshold, going without it is risky.

Medical bills from employee injuries can add up fast, and lawsuits can follow. Workers’ Comp helps protect both your team and your business.

Tip: We recommend to visit the South Carolina Workers’ Compensation Commission for accurate information.

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6. Not Updating Your Policy When Things Change

Did you:

• Add a new delivery vehicle?

• Start catering events?

• Expand your outdoor seating?

• Hire more staff?

Each of these changes could affect your insurance needs. We often see policies that haven’t been reviewed in years, and they don’t reflect the current business.

At Davis Insurance Associates, we recommend a quick annual review to catch these updates before they lead to uncovered claims.

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7. Shopping on Price Alone

We get it – restaurant margins are tight, and saving on insurance is tempting. But the cheapest policy isn’t always the best.

It might leave out critical coverage like equipment breakdown, employee dishonesty, or food spoilage. Or it might come with high deductibles or exclusions that limit protection when you need it most.

A good insurance agent should help you compare both price and protection, not just hand you the lowest quote.

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Final Thoughts for SC Restaurant Owners

Restaurant insurance isn’t just a box to check – it’s a safety net for your business, your team, and your peace of mind.

If you haven’t reviewed your coverage lately (or if you’re not sure what you actually have), we’d be happy to take a look. We work with restaurants across Myrtle Beach, Charleston, Columbia, and throughout South Carolina.

Let us help make sure you’re properly protected – so you can focus on serving great food and growing your business.

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👨‍🍳 Need a Restaurant Insurance Check-Up?

Contact Davis Insurance Associates today for a quick review and quote.

📍 Serving Myrtle Beach and all of South Carolina
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