Tourism provides businesses in Hawaiʻi with a significant seasonal income while creating an environment of togetherness that welcomes visitors to enjoy the products and services they offer. However, tourist season also creates an increase in liability risks, leaving many businesses struggling to meet the temporary demand while protecting their assets, employees, and visitors.
Even policies that provide solid protection for the majority of the year may leave costly coverage gaps during peak tourist seasons. Updates to general liability, product and property, and business owner policies (BOPs) are recommended to accommodate seasonal demands and risks.
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We’ll review the risk factors of tourism surges on business owners in Hawaiʻi and how they can adapt insurance policies to cover the increased risks.
The Impact of Tourism on Liability Assessments in Hawaiʻi
Businesses in Hawaiʻi have always had to manage visitor-related risks, especially injuries, compared both to other states and to their own off-seasons. According to the Hawaiʻi Department of Health, injuries account for more deaths in Hawaiʻi than all other causes combined, including heart disease and cancer.
For businesses in Hawaiʻi, the prevalence of injuries among residents indicates an urgent need for increased awareness concerning visitor safety and communication. Business insurance is one of the main ways that businesses can prepare, but changes in tourist activity can cause inconsistencies in insurance plans. In off-seasons, businesses may overpay for coverage in preparation for peak season. During peak season, they may create costly coverage gaps in an attempt to save money.
Key Takeaway
Tourist season may keep Hawaiʻi’s businesses on their toes, but the risks don’t stop in the off-season. Flexible insurance plans help protect your business year-round so you can focus on serving customers without worrying about your liability.
How to Address Shifts in General Liability
General liability insurance is the foundation of business insurance policies, covering the business during claims resulting from normal activities. These include:
- Injury claims, including medical expenses
- Copyright infringement and other advertising injuries
- Damage to personal property or property loss
- Professional mistakes, including mischeduling
General liability can include other coverages, but its purpose ist to provide businesses with a foundational safety net. However, when tourist season peaks, the business’s risk assessments may change. More people using the business’s services simply means a higher likelihood that something could go wrong.
With an increase in foot traffic, slip and fall accidents become much more likely, as do professional liability and property damage claims.
- In food service, this could mean an increase in food-related liabilities, such as foodborne illnesses.
- In businesses with on-site equipment, more usage can lead to faster wear and tear.
- In hotels and businesses with travel services, guests are at an increased risk of injury due to being unfamiliar with environmental dangers in Hawaiʻi.
In 2024, 40 visitors died due to drowning, a number that often increases when the tourist season is busier.
Next Steps
Consult with local insurance professionals to learn how business operations could be impacted by general liability changes during tourist season. Local agencies are familiar with how tourism surges impact businesses in Hawaiʻi, as well as how local industries react to seasonal changes.
Comparing Operational Factors at Different Activity Levels
Each type of business insurance has different risk assessments, based on the activity level of the business. Typical factors to consider:
| Operations Factor | Off-Season | Peak Season | Insurance Steps |
| Foot Traffic | Predictable levels aligned with staffing patterns and safety training workflows | Heavier pace, increasing the chance of accidents and the need for employee oversight | Raise BOP liability limits during peak season and adapt customer safety training protocols |
| Product Usage | Demand standardized to industry trends with predictable inventory management | Higher product turnover, strained quality control workflows | Product liability claims increase depending on industry, suggesting a need for sector-based insurance assessments, such as food safety |
| Equipment Usage | Predictable maintenance schedule based on off-season usage | Higher strain on facilities, including equipment, walkways, restrooms, and rental services | Assess BOP commercial property liability limits for a potential coverage gap |
| Employee Workload | Consistent safety training protocols and injury rates based on normal customer activity | Higher pace with riskier safety oversight due to overworked permanent staff or undertrained temporary staff | Align safety training protocols with seasonal activity spikes; consider increased workers’ compensation liability limits for peak months |
| Online Systems | Online bookings, transactions, and cybersecurity needs follow predictable device usage patterns | Higher online reservations and payments strain security and processing infrastructure | Cyber-activity policies can be added to BOPs to supplement general liability during peak activity |
| Customer Safety | Regular customers may be more familiar with local customs and more predictable to manage | Increased tourists may increase expectations and decrease local familiarity, potentially raising safety risks | Claims resulting from safety workflows, signage, and scheduling may increase, suggesting a need for higher general liability limits |
While BOPs insure a business from liability for most of the year, spikes in tourism can leave costly coverage gaps that can overload an unprepared business. Local insurance agents help businesses change their policies to match their changing needs.
How Business Owners in Hawaiʻi Can Adapt to Tourism Risks
At Atlas Insurance, our agents have helped businesses in Hawaiʻi manage tourism-related risks for almost 100 years. We combine global resources with strong local experience to provide businesses insurance, risk management, employee benefits consulting, claims management services, and more. Tourist season may impact the type or amount of insurance that business owners need, which is why a personalized risk assessment from one of our local agents is the best way for business owners in Hawaiʻi to avoid coverage gaps during tourism highs and lows.