Whether you operate a boutique in Charleston or run a contracting firm in Greenville, understanding small business insurance in South Carolina protects your business and keeps you compliant. Between coastal weather risks and licensing rules, the right coverage isn’t optional—it’s required for legal protection and financial survival.
This guide explains South Carolina’s commercial insurance requirements, top risks, and cost factors.
Who Needs Coverage and Why It's Required
South Carolina requires specific insurance coverage based on how you operate your business.
Here’s what’s required:
Workers’ Compensation: Under S.C. Code Ann. § 42-1-150, if you have four or more employees (part-time or full-time), you must carry workers’ comp. Exemptions include certain agricultural employees and specific circumstances as defined in the statute.
Commercial Auto Insurance: Required for any business-owned vehicle under South Carolina’s Motor Vehicle Financial Responsibility Act, with minimum coverage limits specified in S.C. Code Ann. § 38-77-140. You must meet minimum limits for both:
- Liability: $25,000 per person, $50,000 per accident, and $25,000 for property damage
- Uninsured Motorist Coverage: Required at the same limits
Professional Liability: Required for specific licensed professions. Requirements vary by profession and are governed by respective licensing boards.
Missing mandatory coverage can lead to license denial or penalties as provided under applicable statutes.
Key Coverages That Protect You
Even if not legally required, most businesses need additional protection to stay open after a loss.
General Liability Insurance: Covers third-party injuries and property damage. Essential for retail, food service, and other customer-facing businesses.
Business Owner’s Policy (BOP): Bundles general liability and property coverage, often providing cost savings versus separate policies.
Cyber Insurance: Helps cover data breach recovery, client notification, and legal defense costs.
Professional Liability (E&O): Critical for consultants, IT providers, and real estate agents, this covers contract errors or service disputes.
Contractor Insurance: Combines tools, commercial auto, and job site liability for roofers, electricians, and general contractors.
South Carolina Business Risks
From hurricanes to liability claims, South Carolina business owners face many risks that can trigger costly claims.
Weather Damage: Hurricanes, tornadoes, and flooding are common—especially near the coast. These events can cause significant commercial property losses.
Slip-and-Fall Claims: These are common general liability claims, with retailers and food service businesses facing elevated risk.
Sewer Backups & Flooding: Columbia, Charleston, and Myrtle Beach all face drainage issues. It is critical to note that flood damage requires a separate federal flood insurance policy and is not covered by standard property insurance.
Discover cost-saving strategies in our guide: Local Business Insurance Solutions to Save You Money.
Cost of Small Business Insurance in South Carolina
Your premium depends on multiple factors that insurers use to assess risk and determine pricing:
Business Factors:
- Industry type and risk classification
- Business size and number of employees
- Annual revenue and payroll
- Geographic location within South Carolina
- Years in business and claims history
- Business operations and activities
Coverage Factors:
- Types of coverage selected
- Policy limits and deductibles chosen
- Bundle discounts for multiple policies
- Safety programs and risk management practices
Location-Specific Factors: Operating in coastal cities like Charleston and Myrtle Beach may affect costs due to hurricane risk, and property policies in these areas often include separate hurricane deductibles.
Risk Assessment Factors:
- Claims history across all policies
- Credit history (where legally permitted)
- Safety training and certifications
- Building conditions and security measures
What to Expect When Filing a Claim
The claims process requires prompt action and proper documentation.
For Workplace Injuries: Under S.C. Code Ann. § 42-19-10 and Workers’ Compensation Commission regulations, you must file a First Report of Injury or Illness (Form 12A) with the Workers’ Compensation Commission within 10 business days of learning of the incident.
For Other Claims: Report the loss to your carrier promptly per policy requirements, document everything with photos and receipts, and cooperate with any inspections.
All claims are regulated by the South Carolina Department of Insurance (SCDOI) under Title 38 of the South Carolina Code. Delays in filing can impact your claim.
2025 Insurance Trends and Compliance Considerations
- Hurricane underwriting has become more stringent across the Lowcountry region.
- Cyber coverage is increasingly expected by many vendors and clients for data protection.
- Technology-assisted quoting tools are helping small firms compare coverage options more efficiently.
What to Do Next
Every business needs strategic insurance to stay compliant and protect against financial losses.
Consider these steps:
- Review your legal obligations based on your industry and business structure
- Evaluate bundling options for general liability, property, and cyber coverage
- Compare policies to find appropriate coverage for your business needs
- Consult with a licensed insurance professional to determine optimal coverage levels
Proper insurance planning helps protect your business assets and ensures compliance with South Carolina requirements.
Need a quick quote or policy checkup? Call 855-718-7552 to talk with a licensed advisor today.
