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Liability Insurance Considerations for Hawaiʻi’s Tourism and Hospitality Businesses

July 29, 2024, by Atlas Insurance Agency

view of the sandy Waikiki city beachAs one of the most visited places in the world, tourism and hospitality businesses represent a significant portion of the economy in Hawaiʻi. From family-style restaurants and boutique hotels to tour operators and event planning services, businesses in these sectors have great growth potential but also carry significant risks.

Enlisting an experienced insurance agency familiar with the area will give you access to business liability insurance designed for businesses in Hawaiʻi.

Importance of Liability Coverage for Tourism and Hospitality Businesses

Despite having strict policies in place to prevent losses, tourism and hospitality businesses are prone to property damage, legal liabilities, accidents, and natural disasters. Carrying the right insurance as a tourism or hospitality business located in Hawaiʻi protects against a variety of risks commonly experienced in the area.

Businesses in these industries also invest heavily in physical assets, such as furniture, machinery, and property equipment, especially tour-based companies. Without adequate insurance, damage or theft could force the company to repair or replace assets out of pocket.

Liability claims are also common in the world of tourism and hospitality. Such claims can result from injuries or accidents that occur on business premises or during activities organized by the business.

Adequate insurance coverage can help cover medical costs, legal expenses, compensation payouts, and similar expenses, reducing the financial burden on the business.

Recommended Business Liability Insurance Policies for Hawaiʻi Businesses

As a business in Hawaiʻi’s unique tourism and hospitality industry, consider carrying the following business insurance policies:

General Liability Insurance

With general liability insurance (GLI), tourism and hospitality businesses can protect against property damage and bodily injuries. This type of policy also covers claims of reputational harm and advertising injury.

Along with protecting the business owner’s investments, GLI can provide reassurance to clients, partners, and vendors, particularly those who require proof of insurance before entering into partnerships and contracts.

Professional Liability Insurance

Also known as errors and omissions (E&O) insurance, professional liability policies cover claims of mistakes or negligence that result in a financial loss for a client. In the tourism and hospitality sectors, businesses often provide professional services, such as event coordination and travel planning.

errors and omissions insurance E&O formIf a travel agent fails to properly book a client’s reservation or if a tour guide provides incorrect information, the business could be held liable for any resulting damages. Professional liability insurance works to cover the related legal expenses, judgments, and settlements that stem from such claims.

Directors and Officers Insurance

Directors and Officers (D&O) insurance is a specialized form of coverage that protects company board members and executives when sued for mismanagement.

In the tourism and hospitality industries, businesses often face complex operational challenges that could result in allegations of negligence, mismanagement, or breach of fiduciary duty. D&O insurance protects company leadership from personal financial liability.

Employment Practices Insurance

Employment practices insurance (EPLI) is recommended to employers who want to protect against claims by employees that allege that their legal rights have been violated.

As these sectors employ a large workforce that consists of diverse positions and job roles, having sufficient coverage can help shield against employment-related claims, such as wage and hour disputes, harassment, discrimination, and wrongful termination.

Cyber Insurance

In the event of a data breach or similar malicious cyber event that involves sensitive customer information, cyber insurance can help cover your business’ liability.

Tourism and hospitality businesses collect and store large amounts of personal guest information, such as credit card numbers. Cyber insurance can help cover expenses related to cyber-events, such as the cost of notifying affected individuals and providing credit monitoring services.

Commercial Auto Insurance

Commercial auto insurance provides financial protection for employers and employees who use vehicles for business purposes. Tourism and hospitality businesses commonly rely on vehicles for their operations, such as in the case of shuttle services and the delivery of goods.

Commercial auto insurance can apply to any type of business-owned vehicle, such as buses, vans, cars, and trucks, protecting these vehicles against damages from theft, accidents, vandalism, or natural disasters.

Commercial Umbrella Insurance

document with shield and check mark with umbrellaMany businesses can benefit from an extra layer of liability protection. If claims costs extend beyond your other liability coverage limits, commercial umbrella insurance steps in to cover additional costs.

Having commercial umbrella insurance can be especially useful for tourism and hospitality businesses that host high-profile events that attract large crowds, such as festivals, conferences, and weddings, which pose significant liability risks.

Protect Your Tourism or Hospitality Business with Atlas Insurance

Business liability insurance serves as a complete way to avoid the damage from claim risks often found in Hawaiʻi’s tourism and hospitality industries.

At Atlas Insurance Agency, we know the impact that an unexpected event or accident can have on your operations and offer an array of coverage options to protect your interests. Get started with your local Atlas Insurance office today.

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