Tort reforms and business impact: The new rules of play

Key points:

• • Tort reform is reshaping litigation, with courts defining how new laws apply in practice.
• • Businesses and insurers are watching reforms closely as liability and insurance costs begin to shift.
• • States across the Southeast are balancing legal protections with efforts to improve the business climate.

July 2026 — Trial court dockets are filling up with a single question: what does tort reform actually require of the businesses and attorneys navigating it. Across multiple states, that fight is playing out case by case, and the outcome will shape how tort reforms and business impact play out for years to come.

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“We are fighting weekly with defense attorneys about what these new laws mean, and there are several cases now working themselves through the appeal process,” said Jeffrey Murphy, trial attorney at the Yerrid Law Firm in an interview with Invest: Tampa Bay.

Evidence rules tighten

Murphy’s firm operates in Florida, where tort reform rewrote two provisions attorneys now confront in nearly every case. One changed the evidentiary proof required to collect past and future medical bills. The other replaced the state’s comparative negligence standard with a stricter bar.

“It used to be that if you were 60% at fault for your own injury and a company was 40% at fault, you could get 40% of your damages,” Murphy said. “Now, if a jury finds you more than 50% responsible for your own injury, you get nothing.”

That threshold changes how firms evaluate a case before they take it on. Murphy said his firm now screens every prospective client for fault exposure at intake, not after discovery. A case that once carried partial recovery now carries none, and that risk moves upstream into the firm’s decision to litigate at all.

Appellate courts have not yet settled how the evidentiary standard applies across case types. Murphy expects clearer guidance within the next year as pending appeals resolve. Until then, trial courts across Florida are building precedent case by case, and outcomes vary by judge and jurisdiction.

The financial stakes behind this litigation are not abstract. According to reports from the Florida Office of Insurance Regulation (OIR), the state has seen major shifts following its sweeping 2023 legal overhauls. Florida’s five largest auto insurers, covering roughly 78% of the market, have filed for an average 8% rate reduction in 2026, and 20 new property and casualty insurers have entered the state since reform took effect, bringing more than $850 million in new capital. Georgia is starting to show similar early signs of relief: State Farm alone has filed rate reductions projected to save Georgia policyholders roughly $400 million a year. The same pressure reshaping Murphy’s caseload is reshaping insurer appetite across both states.

Banks feel the same squeeze

The tort reforms and business impact story does not stop at the courthouse. John McNair, president and CEO of the Community Bankers Association of Georgia, said tort reform legislation now under consideration at the state level sits near the top of his members’ agenda, for a straightforward reason: litigation-driven insurance costs hit community banks directly.

“We strongly support these efforts, as insurance costs related to litigation are extremely high for community banks,” McNair said in an interview with Focus: Atlanta. “If passed, tort reform could significantly reduce those costs.”

McNair also pointed to debanking legislation, both in Georgia and nationally, as a related priority. Some larger banks have declined to serve certain business types or backgrounds, he said, while community banks take the opposite approach.

“We are willing to bank any business that is creditworthy,” McNair said. “That stance is central to our mission.”

Rather than resting on a fully passed omnibus package, Georgia’s path has been a gradual, highly contested legislative push. While state leaders continue to advocate for sweeping changes, the industry has seen incremental packages, such as limiting direct-action lawsuits against truck insurers, while debate continues over broader changes to medical damage calculations and third-party litigation funding. Georgia now stands alongside Florida as one of the states insurers watch most closely.

South Carolina weighs the balance

Dean Faile, president and CEO of the York County Regional Chamber of Commerce, frames tort reform as one of the two biggest challenges facing South Carolina businesses today. Liability exposure, he said, does not scale with fault.

“Businesses can find themselves facing substantial liability exposure even when they are responsible for only a small portion of an incident,” Faile said in an interview with Invest: South Carolina. “The current environment has contributed to rising insurance costs and a decline in the number of liability insurance providers operating in the state.”

Faile said some industries have seen dramatic year-over-year increases in liability premiums, a trend he calls unsustainable. He wants South Carolina to study what has worked elsewhere rather than default to either extreme.

“We need a balanced system that protects individuals while also supporting a healthy business environment,” Faile said. “Other states have found workable solutions, and South Carolina needs to continue exploring reforms that strike the right balance.”

These systemic pressures highlight the gap between legislative reform and immediate business relief. For years, South Carolina venues have shuttered or struggled under a strict 2017 mandate requiring a $1 million liquor liability policy combined with severe joint and several liability rules (where a business found minimally at fault can be forced to pay 100% of a lawsuit judgment).

To alleviate this crisis, Gov. Henry McMaster signed the Tort Reform and Liquor Liability Act (Act 42), which went into effect on Jan. 1, 2026. The new law allows establishments to scale back their mandatory insurance requirements if they implement risk-mitigation standards.

However, because these legal remedies are new and apply only to claims filed after the start of 2026, local businesses are still feeling the backlog of the pre-reform era. A March 2026 WBTV report profiled how Lancaster County’s only brewery, Benford Brewing, was forced to temporarily close its doors after its policy expired with no insurer willing to offer an affordable renewal quote—highlighting the exact lag Faile describes: reform is finally on the books, but tangible market relief is still pending.

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