Georgia’s Tort Reform A Lifeline for Small Businesses On April 22, Georgia Gov. Brian Kemp signed historic legislation, delivering meaningful tort reform and what some hope will be a lifeline for small businesses throughout the state. For too long, small businesses in Georgia have been struggling to keep their doors open under the weight of frivolous lawsuits. The issue threatened the livelihoods of many main street businesses by driving up insurance premiums and diverting vital resources away from growth and innovation. The issue came to a head in November 2024, when the Georgia Office of the Commissioner of Insurance and Fire Safety issued a report summarizing its findings concerning the state of the casualty insurance market and included proposed reforms. According to their report, the five-year average claim count increased by over 24% between 2014-18 and 2019-23. The report showed a steady increase in policy limits claims and losses that exceeded $1 million. The rising frequency of claims and severity was only further amplified by the legal landscape in Georgia, which was ranked as the fourth worst jurisdiction in the country according to the American Tort Reform Foundation (ATRF). A statement from the ATRF expounded on the issue, saying, “Georgia’s civil justice system is plagued by skyrocketing nuclear verdicts, inflated awards for medical costs, expansive premises liability and laws that set up defendants to fail, creating endless liability.” They went on to say that the “lawsuit abuse and excessive tort costs wipe out billions of dollars in economic activity annually.” To that point, a study conducted by the Perryman Group noted that Georgia citizens each pay a “tort tax” of $1,372.94 in higher product prices, reduced economic activity and the 137,658 jobs that are lost each year because of abusive tort litigation. On Jan. 30, 2025, Gov. Kemp, along with Lt. Gov. Burt Jones, Speaker Jon Burns, Commissioner John King and leaders from industries across the state unveiled a tort reform package. The package aimed to level the playing field in courtrooms, ban hostile foreign powers from taking advantage of consumers and legal proceedings, stabilize insurance costs for businesses and consumers, and increase transparency and fairness. SB 68, referred to as the “Act,” was sponsored by 25 senators and directly addressed the rising tide of lawsuit abuse that has negatively impacted Georgia’s small business owners. Efforts THE GENERATOR 22
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