In an average year, a Hawaiʻi-based business faces weather, high tourism rates, legal liabilities, and more. As a small business owner, these factors impact your bottom line and determine the amount of insurance you will need to sufficiently protect your employees and safeguard your assets from loss, theft, and damage.
This article breaks down the ins and outs of small business insurance in Hawaiʻi. We’ll help you understand how to get the right coverage to protect your company and keep it up-to-date as risks change throughout the year.
Whether you’re running a small beach-side shop or a large resort, we’ve got you covered with practical advice for meeting Hawaiʻi’s unique business insurance needs.
Steps to Choosing a Business Insurance Policy
The amount and type of insurance your business needs depends on the size of your workforce, the regulatory requirements in your industry, your total asset value, and more. However, businesses of any size can cover their legal and operational requirements by following these simple steps to choosing the right business insurance policy:
1. Assess Vehicle Status
If your business owns and operates vehicles in Hawaiʻi, you are required to have commercial auto insurance. The liability limits and coverage that your business needs will depend on the type of cargo and vehicles you deploy as well as your drivers’ credentials, the accident risk in your area, and more.
For example, non-hazardous commercial freight may require liability coverage up to $300,000. However, transporting hazardous chemicals, oil, or other flammable products may require as much as $5 million in liability. A good rule of thumb is that the higher the cost of damage or cleanup in the event of an accident, the more insurance your business will need.
Additionally, businesses that transport passengers are not insured the same way as those transporting goods. Even if you use a personal vehicle for work purposes, you will need a commercial auto policy to cover damage and accidents. Hawaiʻi requires business owners to have at least $10,000 of personal injury protection (PIP) per person, even if the vehicle is personal.
Neglecting to maintain sufficient coverage based on your business’s vehicle status can put your business at risk for costly coverage gaps.
2. Assess Workers’ Needs
Hawaiʻi also requires businesses, with very few exceptions, to maintain workers’ compensation policies to protect employees in case of injury. Your workers’ compensation policy will cover medical expenses, lost wages, and disability benefits for workers injured during normal operations, helping your business avoid costly litigation in cases involving accident claims.
A workers’ compensation policy should match the needs of your workers. If they operate heavy machinery or work around dangerous chemicals, a policy with a higher liability limit should be considered. Workers who operate vehicles or lift heavy objects are also at an increased risk for injury.
Although coverage amounts will vary, all businesses must maintain active workers’ compensation policies, regardless of whether you have a construction firm or a surf shop. Assess your specific risk factors to prepare for the possibility of paying medical expenses, lost wages, and disability benefits.
3. Consider General Liability Coverage
You may not be required to have general liability coverage, but you should consider it as protection against liability claims for personal injury and property damage involving workers and assets. In many cases, clients may require your business to have this coverage to protect them if something happens during your contract. The landlord of your commercial property may require it as a condition of the lease.
More importantly, if your business is licensed through the DCCA, you may be required to carry general liability coverage. This can change based on your operational needs, industry, and more. We recommend all business owners in Hawaiʻi consider general liability coverage before signing contracts or leases.
4. Assess Specific Coverage Needs
Outside of these general coverage requirements, consider the specific coverage needs of your business when choosing your commercial business policy. Commercial umbrella insurance can cover additional circumstances and coverage amounts.
For many business owners in Hawaiʻi, extra liability coverage is key to preventing out-of-pocket costs for litigation, worker injury claims, downtime, and asset damage. As your business prepares for the influx of tourists during these seasons, review your current policy to identify areas that may leave your business vulnerable.
Contact Atlas Insurance to Choose the Right Coverage for Your Business
In Hawaiʻi, laws set the baseline for the business insurance you need to operate legally. But let’s face it – every business is different. Depending on your industry and how you work, you might need different levels or types of coverage.
Take a good look at your company, including vehicles, team, equipment, and even how your risks change with the seasons. This will help you figure out what insurance coverage makes sense for your business.
Regardless of what type of business you have, the team at Atlas Insurance can help you choose the right commercial business insurance. We have helped local businesses in Hawaiʻi customize policies for their specific needs for almost 100 years. Contact us today to learn about the coverage that makes sense for your business, and how you can maintain your policy year-round.