State
South Carolina business insurance requirements
South Carolina business insurance rules: comp at 4 employees, statutory employer liability, 25/50/25 auto, a 6% surplus lines tax and 2026 tort reform.
Workers' compensation
| Who must carry it | Required for employers that regularly employ four or more employees in the same business in the state, unless total payroll in the previous calendar year was under $3,000 (S.C. Code 42-1-360(2)) |
|---|---|
| Employee threshold | 4 employees |
| Who can be excluded | Casual employees, agricultural employees, railroads, state and county fair associations, federal employees, commission-only real estate salespeople with independent contractor agreements and qualifying owner-operator truck drivers are outside the Act (42-1-360); sole proprietors and partners are not covered unless they elect in by notifying the insurer (42-1-130) |
| Construction rule | No separate threshold; an owner or contractor is liable for comp to the workers of subcontractors doing part of its trade or contracted work (42-1-400, 42-1-410), and that liability attaches even if the uninsured sub has fewer than four employees, though a higher tier relying on a sub's representation of coverage can shift continuing benefits to the Uninsured Employers' Fund (42-1-415) |
| Market | Competitive private market |
| State fund | No state fund for private employers; the State Accident Fund insures state agencies and participating local governments (S.C. Code ch. 42-7), and the Uninsured Employers' Fund pays some claims against uninsured employers |
| Rating bureau | NCCI |
| Penalty for not carrying it | Commission fine of $1 per employee per day of noncompliance, at least $10 and up to $100 a day; willful refusal is a misdemeanor punishable by a $100 to $1,000 fine or 30 days to 6 months in jail; the injured employee may sue and the employer loses common-law defenses (S.C. Code 42-5-40, 42-5-45) |
| Workers' comp agency | South Carolina Workers' Compensation Commission |
| Agency phone | 803-737-5700 |
| Agency website | wcc.sc.gov |
Employee benefit mandates
| State disability insurance | No state mandate |
|---|---|
| Paid family and medical leave | No state program |
Commercial auto
| Minimum liability limits | 25/50/25 ($25,000 per person and $50,000 per accident for bodily injury, $25,000 property damage) (S.C. Code 38-77-140); FMCSA limits apply to interstate motor carriers |
|---|
Liability law
| Negligence rule | Modified comparative negligence with a 51% bar under South Carolina case law (Nelson v. Concrete Supply Co., 1991); a defendant less than 50% at fault pays only its share, and from January 1, 2026 fault can be apportioned to other tortfeasors as well as defendants (S.C. Code 15-38-15) |
|---|---|
| Time limits to sue | Personal injury, property damage and contracts 3 years (S.C. Code 15-3-530) |
Insurance regulator
| Insurance regulator | South Carolina Department of Insurance |
|---|---|
| Consumer hotline | 803-737-6160 |
| Website | doi.sc.gov |
| Surplus lines tax | 6% blended broker's premium tax (4% state and 2% municipal) on surplus lines premiums for South Carolina home-state insureds (S.C. Code 38-45-10, in effect in 2026) |
| Property insurer of last resort | South Carolina Wind and Hail Underwriting Association, which writes wind and hail coverage, including business income, on insurable property in the coastal area it serves (S.C. Code 38-75-310 et seq.) |
Laws that shape business insurance in South Carolina
- Four-employee and $3,000 payroll threshold for workers' comp, S.C. Code 42-1-360
- Statutory employer liability for subcontractors' workers, S.C. Code 42-1-400 and 42-1-410
- Several liability for defendants under 50% at fault, with nonparty apportionment from Jan. 1, 2026, S.C. Code 15-38-15
- Liquor liability of at least $1 million aggregate for on-premises licensees open after 5 p.m., S.C. Code 61-2-145
- 6% blended surplus lines tax, S.C. Code 38-45-10
South Carolina requires workers' compensation once a business regularly employs four or more people, unless its payroll is tiny, and it makes owners and general contractors answer for uninsured subcontractors. There is no state fund for private employers, no state disability or paid leave program, and auto minimums are 25/50/25. The bigger story for liability premiums is the 2026 change to how fault is apportioned and the reworked liquor liability requirement for bars and restaurants.
Workers' compensation requirements
The comp law does not apply to anyone "who has regularly employed in service less than four employees in the same business within the State" or whose total payroll in the previous calendar year was under $3,000 (S.C. Code 42-1-360(2)). Ask the Commission how it counts part-time and seasonal workers toward the four. The same section excludes casual employees, agricultural employees (unless the farm elects in), railroads, federal employees, commission-only real estate salespeople with a valid independent contractor agreement, and owner-operator truck drivers who meet its lease-purchase conditions.
Sole proprietors and partners are not employees, but they may elect coverage under the business's policy if they are actively engaged in the business and the insurer is notified (42-1-130). Corporate officer and LLC member treatment is not spelled out in the sections we reviewed; confirm how your carrier and the Commission handle owner exclusions before you rely on one. See can owners and officers exclude themselves from workers' comp?.
| Rule | South Carolina |
|---|---|
| Who must carry it | Employers that regularly employ 4+ employees, unless prior-year payroll was under $3,000 |
| Construction | Owner or contractor liable for subcontractors' workers, regardless of the sub's size |
| Exempt employment | Casual, agricultural, railroad, commission real estate sales, qualifying owner-operators |
| Owner opt-outs | Sole proprietors and partners are out unless they elect in |
| Penalty | $10 to $100 a day; willful refusal is a misdemeanor; employee may sue |
| State fund | None for private employers |
The four-employee threshold does not protect the businesses that hire small subs. A business that contracts out work that is part of its own trade, business or occupation is liable for comp to the subcontractor's workers as if it employed them directly, and a contractor is likewise liable for its subs' workers (42-1-400, 42-1-410). If the sub is uninsured, "regardless of the number of employees," the higher tier pays benefits first. Where the sub represented that it had coverage when hired, the higher tier can petition to move continuing benefits to the Uninsured Employers' Fund (42-1-415). So keep the certificate of insurance you collected; it is your evidence. See managing subcontractor insurance and certificates.
An employer that neglects to insure faces a Commission fine of $1 per employee for each day, at least $10 and at most $100 a day, and while uninsured it is liable either for comp or in a lawsuit in which it cannot use the common-law defenses (42-5-40). Willful refusal is a misdemeanor punishable by a fine of $100 to $1,000, 30 days to six months in jail, or both (42-5-45).
South Carolina has no state fund for private businesses; the State Accident Fund covers state agencies and the local governments that elect to participate (S.C. Code ch. 42-7). NCCI files loss costs. An employer that cannot get coverage voluntarily goes to the residual market, which NCCI administers through the National Workers Compensation Reinsurance Association; for 2026 the servicing carriers are Accident Fund, LM Insurance (Liberty Mutual), Technology Insurance (AmTrust) and Travelers (NCCI administrators; servicing carriers); see assigned risk and residual markets for workers' comp and workers' compensation insurance: how it works.
Disability and paid leave mandates
South Carolina has no state temporary disability insurance program and no paid family and medical leave program. Income replacement during illness or leave is a voluntary benefit, usually group short-term disability. Multistate employers should check state disability and paid family leave programs: every mandate in 2026.
Commercial auto requirements
Auto policies on vehicles principally garaged or used in South Carolina must carry at least $25,000 per person and $50,000 per accident for bodily injury and $25,000 for property damage (S.C. Code 38-77-140). Interstate for-hire carriers need at least $750,000. See commercial auto insurance: what it covers and what it leaves out and FMCSA insurance requirements and filings for motor carriers.
The business insurance market in South Carolina
Hurricanes and tropical rain are the main catastrophe exposure. FEMA declared major disasters for Hurricane Helene from September 25 to October 7, 2024 (DR-4829), Tropical Storm Debby in August 2024 (DR-4835), storms and flooding in November 2024 (DR-4858) and a severe winter storm in January 2026 (DR-4908). Coastal property usually carries a named storm or hurricane deductible; see named storm deductibles: how percentage wind deductibles work and hurricane season and commercial property insurance: what to do before a storm. Flood is excluded from standard forms, and NFIP commercial policies top out at $500,000 for the building and $500,000 for contents, with the program authorized only through December 11, 2026 (FEMA).
The South Carolina Wind and Hail Underwriting Association writes wind and hail coverage, including business income, for insurable property in the coastal area it serves (S.C. Code 38-75-310 et seq.); see FAIR Plans and residual markets for commercial property. Surplus lines placements carry a blended 6% broker's premium tax, 4% state and 2% municipal (38-45-10); see surplus lines taxes, stamping fees and diligent search.
Liability law that affects premiums
South Carolina's comparative negligence rule comes from case law: since Nelson v. Concrete Supply Co. (1991), a plaintiff recovers reduced damages as long as their negligence is not greater than the defendants'. By statute, a defendant found less than 50% of the total fault pays only its percentage of the damages. For actions under the version of S.C. Code 15-38-15 effective January 1, 2026, the jury can apportion fault to other tortfeasors as well as defendants, and a defendant may argue that a nonparty contributed to the injury. Joint and several liability still applies to defendants whose conduct is found willful or reckless, among other exceptions. See tort reform and liability insurance: what changes for business buyers.
Bars and restaurants have a specific requirement. A licensee selling alcohol for on-premises consumption that stays open after 5 p.m. must carry liquor liability, or general liability with a liquor liability endorsement, with an annual aggregate of at least $1 million and a per-occurrence limit of at least half that, unless it qualifies for the statute's risk mitigation program (S.C. Code 61-2-145). See liquor liability insurance and dram shop laws.
Injury, property damage and contract claims all carry a three-year limitation period (S.C. Code 15-3-530).
Where to get help
- South Carolina Department of Insurance (doi.sc.gov): 803-737-6160. File a complaint online through the link on the department's site.
- South Carolina Workers' Compensation Commission (wcc.sc.gov): 803-737-5700. Its Coverage and Compliance Division enforces the insurance requirement, and its site has a coverage verification tool.
Confirm your obligations with the Commission or a licensed broker, and compare states with the workers' comp and benefits requirements by state.
Sources
- scstatehouse.gov/code/t42c001.php
- scstatehouse.gov/code/t42c005.php
- scstatehouse.gov/code/t42c007.php
- wcc.sc.gov/
- scstatehouse.gov/code/t38c077.php
- scstatehouse.gov/code/t15c038.php
- scstatehouse.gov/code/t15c003.php
- scstatehouse.gov/code/t38c045.php
- scstatehouse.gov/code/t38c075.php
- scstatehouse.gov/code/t61c002.php
- doi.sc.gov/
- fema.gov/disaster/4829
- fema.gov/disaster/4835
- fema.gov/disaster/4858
- fema.gov/disaster/4908
- floodsmart.gov/get-insured/buy-a-policy
- fema.gov/flood-insurance/rules-legislation/congressional-reauthorization
- ncci.com/Articles/Pages/RM_ResidualMarketAdministrators.pdf
- ncci.com/Articles/Pages/RM_Servicing_Carriers-2026.pdf
Requirements were checked against these sources on the review date below. Laws and thresholds change - confirm with the state workers' compensation agency or insurance department.
Profile last reviewed October 24, 2026